The Monetary Authority of Singapore (MAS) announced the completion of the first phase of its Central Bank Digital Currency (CBDC) project. In addition, the Singapore central bank is exploring use cases of a potential purpose-bound CBDC, a digital Singapore dollar (SGD).
Invariably, the project which is tagged ‘Project Orchid’ also looked at the infrastructure necessary to implement the digital Singapore dollar.
Attempting to explain the various forms that the SGD can take, MAS outlined that it could be a retail CBDC. Markedly, this retail CBDC will be the digital equivalent of notes and coins issued today by the Singapore central bank. Also, the digital SGD can take the form of privately issued money including tokenized bank deposits or securely backed stablecoins.
To allow senders to define exactly what validity periods and type of shop where their transfers are sent, Phase 1 of Project Orchid explored the concept of purpose-bound digital SGD also called purpose-bound money (PBM). Eventually, it was decided that there is no urgent need for a retail CBDC at present. The country only wants to be prepared in the case of any change.
Therefore, Project Orchid is aimed at building the technical capabilities and competencies necessary for MAS to issue a retail CBDC. Another report stated, “MAS vision is to build an innovative and responsible digital asset ecosystem in Singapore.”
MAS Issues License to Crypto Firms
MAS continues to partner with different entities to initiate trials for the CBDC concept. In the case of its crypto industry, Singapore has maintained a highly regulated atmosphere for the thriving of many crypto exchanges.
So far, Crypto.com has received a virtual assets trading license from MAS. British financial technology company Revolut also tapped a license from the Singapore apex bank.
Other heavyweights in the crypto industry like Coinbase and Blockchain.com are also beneficiaries of the MAS licenses. Project Orchid was announced almost a year ago and since then, MAS has put in so much effort to explore a retail CBDC.
Apart from Singapore, many other nations are also exploring the potential use cases of a CBDC. While others are still in the phase of conducting research like in the case of the Kingdom of Eswatini which recently partnered with Giesecke+Devrient.
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