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MAS-led payments network on path towards commercial adoption
THE Monetary Authority of Singapore (MAS) and Temasek on Monday released a report highlighting the "commercial potential" of Project Ubin, paving the way towards live adoption of blockchain technology.
Project Ubin, which recently concluded its fifth and final phase, is a collaborative project between MAS and the financial industry to test the use of blockchain and distributed ledger technology for clearing and settling payments and securities.
Commissioned by Accenture, the report examined the use of blockchain technology in commercial applications across different industries, and how these applications could benefit from integrating with the blockchain-based payments network prototype developed last November.
These benefits were validated through workshops conducted with more than 40 financial and non-financial firms engaged in the fifth phase of Project Ubin, said MAS and Temasek.
The report found that multi-currency payments network prototype developed under Phase 5 successfully settled payments in different currencies on the same network.
An international settlement network, modelled after this payments network prototype, could enable faster and cheaper transactions than conventional cross-border payments channels.
Project Ubin Phase 5 also validated the use of smart contracts on the payments network prototype in use cases such as delivery-versus-payment settlement with assets on private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance.
The commercial applications of the payments network prototype include cross-border payments in multiple currencies, foreign currency exchange, settlement of foreign currency denominated securities, as well as integration with other blockchain-based platforms to enable end-to-end digitalisation across many industries and use cases.
MAS said the payments network prototype - developed in collaboration with JPMorgan and Temasek - can serve as a test network to facilitate collaboration with other central banks and the financial industry for developing next-generation cross-border payments infrastructure.
Technical specifications for the functionalities and connectivity interfaces of the prototype network have been made publicly available to encourage further industry development.
MAS chief fintech officer Sopnendu Mohanty said: "As with all innovation adoption, there is a time for experimentation, and a time for commercialisation. Following the successful experimentation over five phases, we look forward to greater adoption and live deployment of blockchain technology."
Temasek deputy chief executive officer Chia Song Hwee said: "Phase 5 of Project Ubin has demonstrated the commercial applicability, viability and benefits of blockchain technology across industries, beyond capital markets and trade finance. We look forward to supporting commercialisation efforts emanating from Project Ubin and other application areas, with a view to drive greater adoption of blockchain technology."