SINGAPORE - The Monetary Authority of Singapore (MAS), JPMorgan and Temasek have developed a blockchain-based prototype that enables payments to be made in different currencies on the same network.
This multi-currency payments network has the potential to improve cost efficiencies for businesses, said MAS, which led its development.
It is undergoing industry testing to determine its ability to integrate with commercial blockchain applications.
The applications that were tested successfully will be showcased at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019.
The prototype marks the latest milestone for Project Ubin, a collaborative project by MAS with the financial industry to test the use of blockchain and distributed ledger technology for clearing and settlement of payments and securities. Project Ubin is now in its fifth phase.
The prototype payments network will provide interfaces for other blockchain networks to connect and integrate seamlessly.
It will also offer additional features to support use cases, such as delivery-versus-payment (DvP) settlement with private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance.
MAS chief fintech officer Sopnendu Mohanty said on Monday (Nov 11): "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," he added.
Beyond technical experimentation, the fifth phase of Project Ubin sought to determine the commercial viability and value of the blockchain-based payments network. To date, MAS and its partners have engaged more than 40 financial and non-financial firms to explore the potential benefits of the network.
Chia Song Hwee, president and chief operating officer of Temasek, said: "The inclusion of non-financial services companies has demonstrated applicability of blockchain technology beyond capital markets and trade finance."
JPMorgan is the infrastructure partner of MAS and Temasek for the fifth phase of Project Ubin.
Accenture has been commissioned to publish the project report in early 2020. The report will describe the blockchain use cases that will benefit from a blockchain-based payments network, and set out additional features that the network could provide.
The technical specifications for the connectivity interfaces that were developed will also be released for public access under Apache License Version 2.0.