Singapore Unveils Plan to Ensure Seamless Financial Transactions Across Digital Asset Networks

The Monetary Authority of Singapore’s managing director has outlined the central financial institution’s plan to make sure seamless monetary transactions throughout digital asset networks. “Currently, there’s a proliferation of digital asset networks,” the top of Singapore’s central financial institution stated. “We can’t want these dynamics away and power consolidation of all monetary transactions onto a single community. It is extra possible to work in the direction of making these numerous networks interoperable.”

Singapore’s Central Bank Discusses Digital Asset Plans

Ravi Menon, the managing director of Singapore’s central financial institution, the Monetary Authority of Singapore (MAS), mentioned digital belongings at Singapore Fintech Festival final week.

“Digital assets have two critical features that can fundamentally transform the nature of financial transactions,” he started. The first is tokenization permits monetary belongings to be exchanged with out intermediaries, which “eliminates settlement risk, duplicative reconciliation, and the need for large funding accounts,” he highlighted. The second is tokenization allows “the fractionalization of assets,” making partial collateralization of belongings potential.

The head of Singapore’s central financial institution continued:

To absolutely notice seamless monetary transactions throughout digital asset networks, we should guarantee they’re interoperable.

“Currently, there is a proliferation of digital asset networks, due to different commercial motivations or legal and regulatory requirements,” he described, emphasizing: “We cannot wish these dynamics away and force consolidation of all financial transactions onto a single network. It is more feasible to work towards making these diverse networks interoperable.”

Menon then offered particulars on the central financial institution’s technique to construct the brand new monetary structure by way of Project Guardian. He defined, “MAS and industry partners are tokenizing different asset classes with specific desired outcomes.” Additionally, he mentioned that the International Monetary Fund (IMF) is joining the Project Guardian policymaker group. The MAS established this policymaker group in October in partnership with Japan’s Financial Services Agency (FSA), the Swiss Financial Market Supervisory Authority (FINMA), and the United Kingdom’s Financial Conduct Authority (FCA).

The central banker also discussed digital money. He explained that privately issued cryptocurrencies, central bank digital currencies (CBDCs), tokenized bank liabilities, and well-regulated stablecoins are “four contenders for digital money.” Noting that many crypto buyers have “suffered significant losses,” he opined:

Cryptocurrencies have failed the take a look at of digital cash. They have carried out poorly as a medium of alternate or retailer of worth. Their costs are topic to sharp speculative swings.

“Wholesale CBDCs and tokenized bank liabilities can play the role of digital money and help to achieve atomic settlement,” acknowledged Menon. Noting that well-regulated stablecoins may also “play a useful role as digital money,” he stated the financial authority has granted in-principle approval beneath the Payment Services Act to a few stablecoin issuers: Straitsx SGD Issuance, Straitsx USD Issuance, and Paxos Digital Singapore.

What do you concentrate on the statements by MAS Managing Director Ravi Menon and the central financial institution’s digital asset method? Let us know within the feedback part beneath.