An expanded collaboration with international partners, Ubin+ will have its focus centred around the following use cases:
Studying business models and governance structures related to cross-border FX settlement, with a focus on atomic settlement which, based on digital currencies, is believed to help improve efficiency and reduce settlement risks, as opposed to current payment and settlement rails.
Developing technical standards and infrastructure to support connectivity, interoperability, and atomic settlement of currency transactions across platforms that use both distributed ledger technology (DLT), and non-DLT based financial market infrastructures.
Establishing policy guidelines in relation to the connectivity of digital currency infrastructure across borders for improved access and participation, guidelines which will include policy related to governance, access, and compliance affiliated issues for these types of linkages.
As part of the Ubin+ collaboration, MAS announced in their press release that the following projects are set to be undertaken with international partners:
Foreign Exchange and Liquidity Management: Project Mariana – which is a collaborative initiative looking to explore the exchange and settlement of Swiss franc, Euro, and Singapore dollar wholesale CBDCs with an automated market maker (AMM) arrangement (AMM is a DeFi concept that enables the exchange and settlement of two or more digital assets to be performed in an automatic manner with a smart contract). The partners involved in the project are MAS, Banque de France, Swiss National Bank, and the Bank for International Settlements Innovation Hub’ Eurosystem, Switzerland, and Singapore Centres.
DLT and non-DLT payment system interoperability – together with over 17 central banks and global commercial banks, MAS is participating in SWIFT’s CBDC Sandbox to explore cross-border interoperability across digital currencies based on both DLT and non-DLT payment systems.
Connectivity across varying digital currency networks – with wholesale digital currencies believed to gain traction as a cross-border exchange medium, MAS is looking into potential mechanisms that further connectivity maintenance across CBDC and other varying digital currency networks. Furthermore, MAS will study how smart contracts can be used for efficiency optimisation and counterparty risks reduction when settling cross-border transactions.
When speaking on the initiative, fintech MAS officials have stated in their press release that interoperable wholesale digital currency is believed to offer efficiency gains through an increasing range of cross-border use cases. As such, these use cases will be evaluated simultaneously to keep pace with technological advancements, with the focus being on use cases that create value to the widest range of stakeholders, continuing by stating that collaborating with like-minded partners will expedite central banks’ collective progress in optimising digital infrastructures.
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