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Monetary Authority of Singapore welcomes digital currency cooperation with China

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Singapore is one of the nations that has led research into central bank digital currencies (CBDC) with its multi-phase Project Ubin. In a speech last week about financial cooperation between Singapore and Shanghai, Ravi Menon, the Managing Director of the Monetary Authority of Singapore (MAS), welcomed cooperation with the People’s Bank of China (PBoC) on digital currency.

He commented that the aim of Project Ubin was to reduce cross border payment costs, speed up settlement and ensure security. Concerning cooperating with the PBoC, Chinese media reported that Mr Menon said he looked forward to close cooperation with China in this area. 

China is viewed as the most advanced major economy when it comes to CBDC. Its digital yuan is in the testing phase, and a screenshot of a screenshot of a wallet being used in trials was recently leaked. 

In the most recent iteration of Singapore’s Project Ubin, MAS collaborated with JP Morgan and state-backed conglomerate Temasek to use CBDC in multi currency transactions. JP Morgan has its JPM Coin, a tokenized version of dollars for onchain blockchain payments.

At the time, a MAS spokesperson told Ledger Insights: “We are encouraging further collaboration with other central banks, as well as commercial banks, to explore possible cross-border collaboration that may use other blockchain platforms or technology solutions, and to include other foreign currencies on the Ubin test network.”

Chinese media reported the digital currency comments following a speech made last week by MAS’ Menon as part of the Lujiazui Forum 2020. The comments were not part of the official transcript.  We requested confirmation from MAS which said there was a comment in the Q&A segment which mentioned CBDC collaboration with central banks, including the PBoC. 

“Central Bank Digital Currency (CBDC) is an area of interest for the Monetary Authority of Singapore (MAS) and many other central banks. MAS has been exploring the use of wholesale CBDC in making cross-border payments more efficient through Project Ubin. There are various central banks working on similar projects. With the domain knowledge and expertise developed within the respective central banks, we can learn much from each other, with definite benefits for continued discussions and exchanges. MAS has been discussing a broad range of FinTech developments with the People’s Bank of China, and we look forward to continue exploring new areas for collaboration,” said a MAS spokesperson.

In the video conference, Menon noted that the China-Singapore relationship had made progress in growing the offshore renminbi (RMB) market. Chinese state bank ICBC has been a RMB clearing bank in Singapore since 2013. Singapore is the largest offshore center for RMB deposits and RMB trade finance and the second largest offshore foreign exchange trading center for RMB.

“This year will also see the launch of the Singapore-Shanghai Comprehensive Cooperation Council Financial Working Group, which will facilitate financial institutions in our two cities to participate in various areas such as cross-border RMB business and product innovation,” said Menon.

He also outlined other collaborations and the potential to explore finance to aid in a greener and more sustainable economy.

Update: Feedback from MAS spokesperson was added