The Monetary Authority of Singapore (MAS) has joined hands with the MIT Media Lab in Cambridge to help strengthen Singapore’s talent pool in the fintech industry and advance fintech and blockchain research and development.
At the annual Singapore Fintech Festival event, Ravi Menon, managing director of MAS, told the audience that the collaboration will enable Singapore’s local fintech talents to work alongside world-class researchers at the MIT Media Lab to come up with tech solutions to real world use cases. They will run pilots using blockchain, cryptocurrency, quantum computing and Big Data, artificial intelligence, and machine learning.
MAS and the financial industry in Singapore as a whole have been actively engaged in experimentation on blockchain and have developed prototypes on interbank payments, securities settlement, insurance claims processing, trade, and trade finance.
Last year, DBS Bank and Standard Chartered Bank completed a proof-of-concept that demonstrated how blockchain enables banks to detect if an invoice had already been financed. Shortly after, HSBC and Bank of America did a proof-of-concept that showed how blockchain and smart contracts could streamline trade finance processes.
“Blockchain technology offers good promise to make trade finance safer and more efficient,” Menon said, noting that MAS and the Hong Kong Monetary Authority are jointly developing the Global Trade Connectivity Network (GTCN), a cross-border platform for trade finance using distributed ledger technology (DLT).
“GTCN will be an open architecture platform that enables the seamless transfer of digital documents and data across borders, starting with the Singapore-Hong Kong trade corridor,” he said. “If all goes well, we expect the GTCN to go live in early 2019.”
Separately, MAS has been working with a group of financial institutions and tech companies to use blockchain to make cross-border payments and settlements cheaper and faster. The initiative, called Project Ubin, seeks to enable entities across different jurisdictions to make payments directly to one another without intermediaries with much greater speed and efficiency and at lower cost and risk.
A report on the project as well as source codes of the DLT prototypes for inter-bank payments developed on Corda, Hyperledger Fabric and Quorum were released today.
Sopnendu Mohanty, chief fintech officer of MAS, said that by open sourcing these prototypes, MAS hopes it will encourage other central banks to conduct similar trials and engender further development on domestic inter-bank payments.
“This is our contribution to the global financial ecosystem, and a step towards developing cheaper, safer and more efficient cross-border payments,” he said. “We aim to link up such DLT-based systems in the future for improved cross-border connectivity.”
Singapore’s focus on blockchain technology is part of the city-state’s broader ambition to create a Smart Finance Centre and become a global fintech leader. According to the central bank, there are currently about 50 fintech startups in the blockchain based in Singapore. Major tech consulting firms and system integrators have also set up dedicated practices or teams for blockchain in Singapore.
MAS kicked off its second annual Singapore Fintech Festival, a week-long event dedicated to fintech and digital finance, on Monday. This year, more than 25,000 participants from across 100 countries are attending the festival.