Singapore central bank to spearhead harnessing of blockchain tech for interbank payments

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A view of the Monetary Authority of Singapore‘s head office in Singapore Reuters The Monetary Authority of Singapore(MAS)

has actually formed a consortium with The Association of Banks in Singapore(ABS)to develop software application prototypes for decentralised inter-bank payments and settlements using the blockchain technology.According to a joint news release by the two entities, the job

is carried out along with 11 other banks and five innovation firms and is the second stage of the central bank’s Job Ubin.To recall, Project Ubin was launched by MAS to explore making use of Distributed Ledger Technology(DLT )for cleaning and settlement of payments and securities. The very first phase of the task was revealed in November 2016 and included a partnership with DLT company R3.ABS Director Ong-Ang Ai Advantage stated the collaboration of banks and other tech gamers are creating a vibrant financial community.”Task Ubin has actually brought the banks together in try out DLT in a collaborative, open and transparent way.

We are motivated that this outcome might potentially be leveraged on by the banks to catalyse the development of more ingenious options, “he said.The taking part financial organizations consist of Bank of America Merrill Lynch, Citi, Credit Suisse, DBS Bank Ltd, HSBC Limited, J.P. Morgan, Mitsubishi

UFJ Financial Group, OCBC Bank, Singapore Exchange, Requirement Chartered Bank, and United Overseas Bank.This second phase intends to develop prototypes of three models, which are among the very first in the world to carry out decentralised netting of payments in such a way that

preserves transactional privacy.MAS Chief Fintech Officer Sopnendu Mohanty said among the crucial outcomes of the consortium’s effort is the ability to carry out netting while securing the privacy of transactions.”This assists to open a chance for a wider adoption of DLT-based settlement systems. We are sharing our learnings and knowledge from Task Ubin to encourage higher experimentation among reserve banks and banks. We eagerly anticipate dealing with other main banks on making use of DLT for cross-border applications,”Mohanty said.Just to give a background, the current netting programmes used in inter-bank payments count on a single payment queue available to the operator to find balancing out payments. Decentralising the said queue

would potentially expose payment details to an unauthorised party.The job findings and details of the models developed will be reported by Accenture. This report is anticipated to support reserve banks and financial players who have started their journey of utilizing blockchain. It will be presented throughout the Singapore

FinTech Festival.