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Singapore Monetary Authority

4 Retail CBDC trials to begin in Singapore: MAS

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The first phase of the Monetary Authority of Singapore’s (MAS) Project Orchid investigation into a retail central bank digital currency (CBDC) is now complete. Although there is no “immediate case” for a retail CBDC in Singapore, the white paper published on October 31 envisioned the infrastructure needed in case one did. A new kind of digital currency called “purpose-bound money” was also proposed, and a series of experiments attracted major Singaporean banks and government organizations to the study.

Singaporean customers do not yet require a digital dollar because of the high-quality services that are already readily available, according to the authors. However, they suggested that the most likely use case would serve the MAS rather than users.

“Electronic payments in Singapore are pervasive, and households and firms in Singapore are already able to transact digitally in a fast, secure and seamless manner today. […] The case for a retail CBDC in Singapore could strengthen over time, especially if innovative uses emerge or there are signs that digital currencies not denominated in SGD are gaining traction as a medium of exchange locally.”

The MAS developed its purpose-bound money (PBM), which “specifies the conditions upon which an underlying digital currency can be used,” using the concepts of programmable payment (“the automatic execution of payments once a pre-defined set of conditions are met”) and programmable money (“embedding rules within the medium of exchange itself that define or constrain its usage”).

The authors of the white paper stated that vouchers would work effectively with this strictly limited, non-intermediated form of CBDC. From November 2 to 4, there will be four trials at the Singapore FinTech Festival.

CBDC Trial Initiative Leads DBS Bank Issuing Digital Singapore Dollars

In a trial initiative, DBS Bank announced that it would issue digital Singapore dollars equipped with smart contract capabilities made available by the Open Government Products office. This would enable rapid settlement and spare retailers one or two days of processing time. Six retailers and one thousand customers are taking part in the pilot. The Community Development Council scheme offers households vouchers to offset inflation and the high cost of living, according to the bank, which is Singapore’s biggest bank.

Other financial institutions will distribute government subsidies to persons without bank accounts, issue commercial coupons redeemable during the festival, and distribute grant money to organizations that offer financial training.

Singapore has been looking at a wholesale CBDC since 2016, but the MAS’ expansion into a retail CBDC, which started last year, began with the publication of this white paper.

This Singaporean Exchange Accepts Crypto To Attract High-Net-Worth Clients

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Singapore-based trading platform ADDX has become the first financial firm in the city-state to accept cryptocurrencies as proof of accredited investor status or in other words high-net-worth clients. The recognized assets are Bitcoin [BTC], Ethereum [ETH], and Tether [USDC].

ADDX in a statement on Wednesday stated that it would recognize only those cryptocurrencies that have a higher market cap and would apply discount rates when valuing these assets.

Doubling down on the digital assets market, ADDX CEO Oi-Yee Choo said,

“Cryptocurrencies are here to stay. They no longer exist only on the fringes of wealth and investment conversations”.

“With a large minority of investors owning crypto, it is reasonable for these digital assets to be recognized as a part of one’s portfolio – not unlike any other assets that can be valued in the marketplace, such as real estate or equity,” Choo added.

Under Singapore’s law, individuals need to have at least $217,991 of income from the past 12 months, $1 million in net financial assets, or $2 million in net personal assets to qualify as accredited investors.

ADDX also divulged that it will accept crypto assets only in the category of net personal assets and will apply a 50% discount rate for bitcoin or ether when calculating the value of these holdings and a 10% discount for USDC stable coin.

On the contrary, Singapore’s Deputy Prime Minister Heng Swee Keat has advised retail Investors to stay clear of cryptocurrencies citing that they are “highly risky.” He stressed, “We cannot express this enough.”

Singapore’s Deputy PM Urged Investors To Refrain From Crypto Trading

Speaking along the sidelines of the recently held Asia Tech x Singapore [ATxSG] summit, the minister took a critical note of the fallout of cryptocurrency terra [LUNA] and algorithmic stablecoin terrausd [UST], where many investors reportedly lost millions and used it as an example to support his point.

Singapore has maintained a cautious approach toward crypto, with the country’s central bank, the Monetary Authority of Singapore [MAS], as the main regulator of the crypto sector. 

For the last two years, the MAS has only granted licenses and in-principle approvals to 11 digital payment token service providers. As per reports nearly 100 entities have failed to meet regulator requirements.

Monetary Authority of Singapore Reveals Latest $1.75 Million Fintech Challenge to Combat Effects of Coronavirus

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The world’s financial situation was in jeopardy once global economies were taken over by the coronavirus. Major countries have witnessed a recession like a situation that has caused millions to lose their jobs.

To curb this, the Singapore Monetary Authority [MAS] has kick-started a $1.75 million competition to bring innovative fintech solutions to solve COVID-19 issues. Singapore was one of the few countries that heavily invested in blockchain technology with the goal of helping its citizens.

The MAS Global Fintech Innovation Challenge is set up to promote fintech solutions in the country that would aid frontline workers in the fight against the pandemic. The initiative will be comprised of two different awards, mainly the MAS FinTech Awards and the MAS Global FinTech Hackcelerator. Reports from sources revealed that the challenge will be hosted on the popular API Exchange.

According to inside information, the usage of Apix will not only collate more fintech solutions but also allow said solutions to be contextualized in a practical sense. The 12 winners of the competition will receive a total price of $1.2 million, presented in the Asean FinTech and Singapore Financial Institution category. There will be two different segments for the MAS Global FinTech Hackcelreator: the International Programme and the Local program.

In the International, Programme will comprise of winners from various other fintech competitions conducted at a global level. These separate fintech competitions were sponsored by bigwigs such as the Saudi G-20 Presidency, the Bank of International Settlements Innovation Hub, the United Nations Capital Development Fund, and Women’s World Banking.

The Local Programme, on the other hand, will cover high priority problem statements collated from the finance industry within Singapore as well as other global markets. Competition runners have said that over 107 different problem statements were received in 2020 alone. This was the first time that such a large number of statements were filed under the MAS Global Fintech Hackcelerator Local Programme.