MAS, Bank of Canada use blockchain for first time in trial for cheaper, faster and safer cross-border payments

The Monetary Authority of Singapore (MAS) and the Bank of Canada have been collaborating on the use of distributed ledger technology and central bank digital currencies to make the cross-border payments process cheaper, faster and safer.
The Monetary Authority of Singapore (MAS) and the Bank of Canada have been collaborating on the use of distributed ledger technology and central bank digital currencies to make the cross-border payments process cheaper, faster and safer.PHOTOS: ST FILE, AFP

SINGAPORE (BLOOMBERG) - The Monetary Authority of Singapore (MAS) and the Bank of Canada have sent each other digital currencies using blockchain technology, marking the first such successful trial between two central banks.

The pair have been collaborating on the use of distributed ledger technology and central bank digital currencies to make the cross-border payments process cheaper, faster and safer, they said in a joint statement on Thursday (May 2).

MAS' experimental domestic payment networt, Project Ubin, was linked up with its Canadian counterpart's Project Jasper, as part of the test done in partnership with Accenture and JPMorgan Chase & Co.

"Project Jasper and Project Ubin have built on previous innovations in the payments area to demonstrate that cross-border payment and settlement can be made simpler and more efficient," Sopnendu Mohanty, MAS chief fintech officer, said in the statement. "Together, these projects have addressed many technical questions and brought the technology to a higher level of maturity."

The central banks have jointly published a report that proposes different design options for cross-border settlement systems, highlighting possible limitations and challenges.

"Only through continued collaboration and fundamental research will it be possible for this technology to mature and for policy makers to fully understand its potential," said Scott Hendry, the Bank of Canada's senior special director of financial technology.

David Treat, global blockchain lead for Accenture, called the test "a big milestone for the modernization of cross-border, cross-currency transactions."