MAS Completes The First Phase Of Its CBDC
According to a report published on Monday, the Monetary Authority of Singapore (MAS) has completed the first phase of its central bank digital currency (CBDC) initiative.
This stage of Project Orchid investigated the possible applications of a digital Singapore dollar and the infrastructure needed to execute one. The report said:
“Although MAS does not see an urgent case for retail CBDC, it is envisioned that the study of potential use cases for a programmable digital SGD (Singapore dollar) and the infrastructure required, would enable MAS and the financial services ecosystem in Singapore to develop capabilities to support a retail CBDC should the need arise.”
According to MAS, a CBDC would represent a minor component of the money supply, similar to actual currency. Banknotes and coins produced by the MAS account for just around 8% of the total money supply, while privately created money accounts for 92%.
The next phase of Project Orchid will investigate which ledger technology is ideal for the CBDC and how it can be integrated with the existing infrastructure.
Some CBDC use cases will be investigated in trials with the public and private sectors in 2022 and 2023. At the next Singapore FinTech Festival, the trials will feature a look at government and commercial certificates that may be used to purchase items.
Government disbursements that do not need participants to have a bank account will also be tested, and the CBDC will be utilized to deliver awards automatically.
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