Singapore Considers Blockchain-based Payment Solutions For Cross-border Transactions

Singapore’s Monetary Authority is investigating blockchain-based payment solutions to address cross-border transaction difficulties.

Cross-border transfers are now slow, costly, opaque, and inefficient, relying on an archaic network of correspondent banks, according to Ravi Menon, the central bank’s managing director, in his keynote lecture at Sibos 2022 on Monday.

Cross-border payments, according to Menon, may be enhanced by integrating speedier payment systems, establishing a multi-central bank digital currency (CBDC) platform, and expanding private sector blockchain-based payments networks.

Menon stated at the SWIFT-organized event that tokenized bank deposits provided by the private sector, as well as securely-backed stablecoins, may be utilized for cheaper and faster cross-border payments and settlements. He stated:

“Unlike private cryptocurrencies, whose prices fluctuate wildly, these digital currencies are suitable as payment instruments on distributed ledgers as they combine the advantages of tokenization with the reliability of fiat currencies.”

According to Menon, wholesale CBDCs may be utilized on distributed ledgers to facilitate simultaneous settlements.

Menon stated in August that the central bank prefers wholesale CBDCs, as opposed to ones exclusive to financial organizations.

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