A consortium led by Singapore’s central bank has successfully developed three new blockchain prototypes for interbank payments and settlements.
In an announcement, the Monetary Authority of Singapore (MAS) – the country’s defacto central bank and financial regulator – revealed details of its ongoing blockchain initiative dubbed “Project Ubin.” The central bank and the Association of Banks in Singapore (ABS) participated in the second phase of Project Ubin, a project that saw the central bank develop and issue digital tokens of the Singaporean dollar on a private Ethereum blockchain.
As reported by CCN, Singapore’s central bank first revealed its effort to develop a blockchain to facilitate interbank payments in 2016. The first phase of Project Ubin completed in March 2017 wherein the central bank “achieved the objectives of producing a digital representation of the Singapore dollar for interbank settlement.”
Now, the project – with participants from 11 financial institutions and 5 technology companies – has ‘successfully developed software prototypes with three different models for decentralized inter-bank payment and settlements with liquidity savings mechanisms.’
Singapore’s central bank explained:
The three software models developed are amongst the first in the world to implement decentralised netting of payments in a manner that preserves transactional privacy. Existing netting programmes used in inter-bank payments rely on a single payment queue visible to the operator to find offsetting payments. Decentralising the queue, however, potentially exposes payment details to an unauthorised party. The latest models in Project Ubin achieve a superior combination of decentralisation and privacy.
“A key outcome of the consortium’s effort is the ability to perform netting while protecting the privacy of transactions,” added MAS FinTech chief Sopnendu Mohanty, bullish in his prediction for a wider, systematic adoption of blockchain technology. The official further revealed that the MAS is “sharing our learnings and knowledge from Project Ubin” with other central banks around the world that could ultimately see cross-border applications of blockchain technology between central banks.
A complete report of Project Ubin’s Phase 2 findings will be published by tech and consulting provider Accenture, due to be published during the Singapore FinTech Festival in November.