We don’t need it but we’ll still test it; Singapore flipflops on CBDC stand

Earlier this month ( Nov. 2022), the Monetary Authority of Singapore(MAS) announced it will join the list of central banks across the world that will trial CBDC; even though it had already stated, in an earlier report that it saw little to no use case for CBDC on the retail front.

Partners involved in the project

The project, named Ubin +, will be carried out in collaboration with international partners to test the viability of CBDC. The project will be carried out alongside another similar project that the MAS launched in collaboration with European central banks — the project Marina. Project Marina is a collaboration between the Monetary Authority of Singapore and the Central Banks of France, Singapore, and Switzerland.

In a report released to the media, Ubin+ intends to focus on the following key areas:

· Study how CBDCs can be used to improve speed on cross-border settlements and reduce risk.

· Develop standards for carrying out cross-border transactions using digital currencies while leveraging blockchain technologies and traditional payment rails.

· Establish rules and procedures that will guide cross-border payments. This will involve streamlining government regulation, policies, and legislation across multiple countries.

No rush on CBDC

Even as the country launches its CBDC, authorities say they are in no rush to roll it out to the retail market. They intend to do more trials and tests. Earlier in October, the MAS released a whitepaper stating there was no “urgent need” for a retail CBDC in Singapore at this moment. The paper states that there are already multiple payment options in Singapore.

The MAS is however open to understanding how CBDCs work and seek ways in which to use them to enhance the financial system in Singapore. They also stated that their position on CBDCs may change if digital currencies were to gain mainstream adoption across the world.