SINGAPORE - The Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) announced on Thursday (Oct 5) the achievement of an important step in a project to connect the world's central banks via blockchain technology.
A consortium of banks and technology companies led by MAS and ABS is exploring the use of distributed ledger technology (DLT), commonly known as blockchain technology, to increase speed and privacy in cross-border clearing and settlement of payments and securities.
The multi-phase initiative has been dubbed Project Ubin.
Under Phase 2 of Project Ubin, the consortium has successfully developed software prototypes of three different models for decentralised interbank payment and settlements with liquidity savings mechanisms, MAS and ABS said in their joint release on Thursday.
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, they said.
Said MAS chief fintech officer Sopnendu Mohanty: "A key outcome of the consortium's effort is the ability to perform netting while protecting the privacy of transactions. This helps to open up opportunity for a wider adoption of DLT-based settlement systems.
"We are sharing our learnings and knowledge from Project Ubin to encourage greater experimentation amongst central banks and financial institutions. We look forward to working with other central banks on the use of DLT for cross-border applications."
A report on the Phase 2 findings and details of the prototypes developed will be published during the Singapore FinTech Festival, which will be held from Nov 13 to 17.
Phase 1 of Project Ubin ran for six weeks in November and December last year. It served as the foundation to assess the feasibility and implications of blockchain technology, and to identify the elements required for future enhancements.