Singapore Central Bank’s take on blockchain – The future of international payments

In the age of cryptocurrencies, Singapore Central Bank initiates a project called ‘Project Ubin’ in two phases. The first phase focused on the digitization of the Singapore dollar as data on a blockchain, the second round tackled as an area subject to tests by other central banks worldwide in the real-time gross settlement [RTGS] system.

The Monetary Authority of Singapore [MAS], the city-state’s de facto central bank, has spoken highly about the scope and future of cryptocurrencies and its potential role in international fund transactions.

MAS Managing Director, Ravi Menon said during his speech at a financial industry event:

“This is the challenge that Singapore’s Project Ubin has set itself to solve: to use blockchain technology to enable entities across jurisdictions to make payments to one another.”

Although in another instance he said that people should be wary of blockchain and its dangers, he is now of the opinion that cryptocurrency tokens might become a currency in the future.

During his speech on Thursday, Menon added that MAS has partnered with the Bank of Canada ‘to test and develop a cross-border solution using crypto tokens issued by the two central banks’.

As per the previously reported Initial Coin Offering [ICO] guidance, certain tokens could be regulated as securities.

Menon said:

“Investor protection is another immediate concern arising from the crypto mania….”

“…crypto tokens represent ownership or a security interest over an issuer’s assets or any property, or a debt owed by the issuer, they may be regarded as securities…”

Under this rule, initial coin offering issuers must meet security rules before launching token sales. Further, secondary markets that facilitate the trading of ICO tokens should also be registered and approved by the MAS, according to Menon.

A Twitterati’s take on this matter is:

“Why bank would use xrp with the risk of volatility while they can use xcurrent safely. Or bank will make their own blockchain. China, Iran, and now singapore make their own blockchain.”

Another Twitter user replies:

“Xrp is only subject to a 3 second volatility where as the current swift system takes 3 days in which time currencies can fluctuate also. Furthermore, the price of xrp is currently low, at an inevitably higher value there will be less volatility.”

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