Singapore can lead charge to cashless future

ON Nov 8 last year, India's prime minister Narendra Modi shocked many of the 1.3 billion people in his country by taking out 86 per cent of the cash in circulation overnight without prior warning. Mr Modi cited a need for greater transparency and the desire to fight graft as the main reasons to push for more electronic payments and expressed a vision of a cashless society. A couple of months later, India's central bank announced that it was researching what role the blockchain - the technology behind cryptocurrencies such as Bitcoin and Ethereum - could play in this.

Just this month the Monetary Authority of Singapore (MAS) announced that it has finished the first phase of "Project Ubin" which, according to its website, is an effort that explores the blockchain for clearing and settlement of payments and securities, which is a technical way of saying that Singapore, too, is exploring a cashless future. The good old Singapore dollar could then theoretically be replaced by a tokenised cryptocurrency based on blockchain technology.

India and Singapore's financial infrastructures are hardly comparable. India's efforts to implement financial tech, for example, are handicapped by a lack of access to financial institutions for large swathes of its population. Singaporeans can't turn a corner without stumbling on a functioning ATM. However, losing this battle with India or other countries in the region to implement blockchain in the heart of the financial sector could harm Singapore's position in the long run.