SINGAPORE (July 13): The Monetary Authority of Singapore (MAS) and Temasek Holdings today published a report to mark the successful conclusion of the fifth and final phase of Project Ubin. Mooted in 2016 to explore the use of Blockchain and Distributed Ledger Technology (DLT) for clearing and settlement of payments and securities, the report marks the conclusion of the fifth and final phase of the nearly-half-decade long project.
“As with all innovation adoption, there is a time for experimentation, and a time for commercialisation. Project Ubin has worked with the financial industry and blockchain community on a journey of experimentation, prototyping and learning. This has built a strong foundation of knowledge, expertise and experience, and paved a path towards commercial adoption,” announces Sopnendu Mohanty, Chief Fintech Officer at MAS.
Phase 5 saw MAS develop a blockchain-based payment network prototype with J.P. Morgan and Temasek that enables multi-currency payments to be conducted on the same network. The report, which Accenture was commissioned to publish, studies the use of blockchain technology in commercial applications across different industries, and how these could benefit from integrating with the prototype. Its findings were based on workshops conducted with more than 40 financial and non-financial firms engaged in Phase 5 of Project Ubin.
Says Accenture’s country managing director for Singapore, Lim Lay Teo, “Through Project Ubin, we have identified areas where blockchain-based solutions can be deployed at scale and drive greater payment efficiency across industries. The financial ecosystem is an integral part of Singapore's ambition to be a Smart Nation. The collaboration between financial and non-financial firms to create the network necessary to support multi-currency payments will also drive new products and services that generate new revenue streams.”
According to the study, the prototype successfully settled payments in different currencies on the same network. An international settlement network, it argues, modelled after this payments network prototype, could enable faster and cheaper transactions than conventional cross-border payments channels. It also demonstrated that smart contracts could be effectively used on the network for Delivery-versus-Payment (DvP) settlement with assets on private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance.
“The commercial applications of the payments network prototype include cross-border payments in multiple currencies, foreign currency exchange, settlement of foreign currency denominated securities, as well as integration with other blockchain-based platforms to enable end-to-end digitalisation across many industries and use cases,” announces the MAS release.
MAS believes that the prototype can serve as a test network to facilitate collaboration with other central banks and the financial industry for developing next generation cross-border payments infrastructure. It announced in its release that it would make technical specifications for the functionalities and connectivity interfaces of the prototype publicly available to spur further industry development.
“Blockchain technology has great potential in transforming businesses and opening up new business opportunities. Phase 5 of Project Ubin has demonstrated the commercial applicability, viability and benefits of blockchain technology across industries, beyond capital markets and trade finance,” says Temasek Deputy CEO Chia Song Hwee. He and Umar Farooq, Managing Director & Head of Blockchain at J.P. Morgan, expressed interest in working with MAS and the wider finance sector to develop, scale and promote blockchain technology for the wider industry.
The conclusion of Project Ubin could signal a gradual rollout of blockchain financial solutions in the years ahead. “Following the successful experimentation over five phases, we look forward to greater adoption and live deployment of blockchain technology,” says Mohanty.