Singapore’s Monetary Authority Proposes Digital Money Standards

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Key takeaways:

  • The Monetary Authority of Singapore published a whitepaper outlining the requirements for using digital currencies like stablecoins and CBDCs.
  • The International Monetary Fund, Banca d’Italia, and Bank of Korea, among other financial organizations, contributed to the development of the paper.

The parameters for using different kinds of digital currencies were laid out in a proposal for a standard protocol that was made public by the Monetary Authority of Singapore (MAS).

MAS released a whitepaper on June 21 that includes technical details defining the lifecycle of its novel Purpose Bound Money (PBM) idea, as well as the names of financial institutions and fintech companies that intend to pilot PBM.

PBM intends to make it possible for senders of digital currencies across various platforms, such as central bank digital currencies (CBDCs) or stablecoins, to establish the terms of digital currency transactions, such as the duration of their validity and the kinds of merchants they can use. 

The chief fintech officer of MAS, Mr. Sopnendu Mohanty, remarked that these recent changes had increased the significance of digital currencies in the financial landscape of the future.

“This collaboration among industry players and policymakers has helped achieve important advances in settlement efficiency, merchant acquisition, and user experience with the use of digital money.”

The International Monetary Fund (IMF), Banca d’Italia, and Bank of Korea, among other financial organizations, contributed to the development of the paper. Amazon, DBS, and the fintech company Grab are among the companies doing a PBM trial. For online retail payments, Amazon will explicitly test escrow-like solutions. The seller will only be paid when the consumer receives the things they ordered.

Recently, the IMF disclosed its intentions to create a global platform for CBDCs. With this program, various digital currencies issued by central banks around the world will be encouraged to cooperate, standardize, and work together globally.

The document also urges central banks, financial organizations, and fintech firms to look into further use cases for digital money. As Singapore continues to support cryptocurrency-related enterprises and activity, this has happened.

The recent announcement by Gemini Exchange of its expansion strategy in the Asia-Pacific area includes the establishment of an engineering base in India, with Singapore serving as the operational hub. Over the course of the following 12 months, the company plans to hire more than 100 individuals in Singapore. Singapore will serve as the central hub for Gemini’s developing APAC operations.

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