Singapore’s Central Bank and J.P. Morgan Unveil Payments System

Singapore’s central bank, the Monetary Authority of Singapore (MAS), has developed a blockchain-based milti-currency payment system in collaboration with JPMorgan, the bank announced in a press release on 11 November.

According to the report, the prototype platform was developed as part of the Project Ubin initiative, with the help of JPMorgan and state investment firm Temasek.

The prototype was designed to “provide interfaces for other blockchain networks to connect and integrate seamlessly”, as to enable payments denominated in different currencies to be completed on the same network. The Global Head of Clearing and Interbank Information Network at JPMorgan, John Hunter, said in the press release:

“By leveraging our key learnings from building the Interbank Information Network® (IIN) and the JPM Coin, J.P. Morgan is well-positioned to support the development of a blockchain-based payments network and operate at scale.”

The Project Ubin initiative, which is now in its fifth phase, was originally focused on digitization of the Singapore dollar, but is now focused on the potential of blockchain to support a real-time gross settlement system.

With MAS expecting the new network to provide businesses with significant cost efficiencies, it built the prototype to provide additional benefits such as conditional payments, escrow, payment commitments for trade finance and delivery-versus-payment (DvP) settlement. MAS chief fintech officer, Sopnendu Mohanty, said in a statement:

“We hope this development will encourage other central banks to conduct similar trials, and we will make the technical specifications publicly accessible to accelerate these efforts. We look forward to linking up with more blockchain networks to improve cross-border connectivity. This will be a big step forward in making cross-border transactions faster, cheaper, and safer.”

Currently over 40 financial and nonfinancial companies are working to ascertain the commercial viability and the network’s numerous potential benefits. A major transnational consultancy firm, Accenture, has also been commissioned to file a report on the prototype by early 2020. Said report will not only describe use cases that could benefit from a blockchain-based payments network, but will also include additional features that could be provided by the network in the future.