Blockchain technology may not be new, but it heralds the start of a new era in the financial world and has fired up global excitement among central banks and financial institutions, including Singapore’s three local banks.
This is especially so as 2024 looks like a promising year for breakthroughs, which have so far been elusive, in how the technology is applied to solve real-world problems.
In particular, pilot programmes linked to purpose-bound money (PBM) look encouraging.
PBM is a form of tokenised digital currency that allows issuers to set specific conditions on how it is used.
Currently, OCBC Bank and UOB are looking at how PBM can be programmed to maintain the fungibility of digital money across different digital money issuers, or how digital money can be traded or exchanged for one another.
“We’re now at a stage where once we figure out the legal structures, we will be close to actually trying to launch it,” OCBC’s head of global transaction banking Melvyn Low told The Straits Times in an interview.
Mr Leong Yung Chee, who heads blockchain and digital assets at UOB, said that following the success in the first phase where the trial was done in a closed environment, the bank is moving to the next stage where it will try out its digital Singdollar with OCBC’s in an open environment.
Wholesale central bank digital currencies (CBDCs) will be the common settlement asset in this test.
Wholesale CBDCs are digital currencies issued by a central bank. They are to be used only by central banks, commercial banks or other financial institutions to settle large-value interbank transactions.
Market players said PBM can play a role in government disbursements as it can be programmed to allow money, goods and services tax rebates or care subsidies to be disbursed to people when needed.
Denne historien er fra December 01, 2023-utgaven av The Straits Times.
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Denne historien er fra December 01, 2023-utgaven av The Straits Times.
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