The Monetary Authority of Singapore (MAS) has announced the initiation of “live” trials for a central bank digital currency (CBDC) specifically for wholesale settlements. This move is part of a broader initiative to expand trials in asset tokenization and establish the necessary infrastructure for a digital Singapore dollar. The Orchid Blueprint by MAS outlines the required technology infrastructure for future digital money transfers. These trials, which include various industry players, will test different components, including tokenized bank liabilities for retail payments, first demonstrated at the Singapore FinTech Festival 2023.
The development of CBDC for wholesale interbank settlements will commence next year, marking MAS’s first foray into “live” issuance of wholesale CBDCs after previous simulations in test environments. The initial pilot will focus on settling retail payments between commercial banks, with the possibility of future tests exploring cross-border settlements.
This initiative underscores Singapore’s ongoing exploration of wholesale CBDCs and aligns with global trends where countries are preparing legislation and infrastructure to issue digital versions of fiat currencies. This is seen as a way to stay ahead in payment innovation and as a potential counter to private cryptocurrencies. Ravi Menon, the Managing Director of MAS, emphasized the significance of this move, stating that the “live” issuance of central bank digital money as a common settlement asset is a major milestone in their digital money journey that began in 2016, reinforcing the role of central bank money in enabling safe and efficient payments.
