Singapore's Central Bank Readies for Live CBDC Trials for Bank Settlements

According to Cointelegraph: Taking a decisive leap forward in the digital currency realm, the Monetary Authority of Singapore (MAS) recently announced its plans to implement a live trial of a wholesale central bank digital currency (CBDC) for use by local banks for settlements. The ground-breaking news coincided with the Singapore Fintech Festival, showcasing MAS's forward-looking financial strategies. Project Guardian members include big banks Citi, HSBC and BNY Mellon. Source: mas.gov.sg The managing director of MAS, Ravi Menon, disclosed the development during his address at the festival, reaffirming MAS's commitment to revolutionizing the banking sector. He illuminate that "MAS will pilot the ‘live’ issuance of wholesale CBDCs to instantaneously settle payments across commercial banks" in contrast to previous trials that involved simulated CBDC issuance in test environments. As reported, the central bank's new approach will involve close partnership with Singaporean banks to employ a CBDC as a settlement asset for domestic payments. The pilot program will potentially enable banks to issue tokenized liabilities reflecting a claim on their balance sheets, facilitating seamless customer-merchant transactions settled via an automated transfer of the wholesale CBDC. The move towards a CBDC settlement asset signifies a significant shift away from segregated clearing and settlement systems, imminently resulting in a more robust, single-step, and instantaneous solution. Adding to the digital currency developments, MAS has incorporated five new industry pilots into its comprehensive financial infrastructure test initiative, Project Guardian. The recent collaborations have grown the membership of the project from 12 to a substantial 17, featuring prominent participants, including BNY Mellon, HSBC, and Citi Group. Earlier this year, MAS alongside the New York Federal Reserve released a revealing study on the cross-border payment benefits of CBDC through their joint initiative, Project Ubin. The encouraging results substantiated the potential of CBDCs to streamline cross-border payments while curbing costs, sealed with six years of rigorous trialing.