Singapore's central bank dabbles with digital currency
Singapore's central bank, the Monetary Authority of Singapore, is venturing into the fintech world by testing digital currency for its operations. MAS is looking to use blockchain-driven digital currency for its interbank payments, reports said. The bank also stated that it would explore cross-border digital transactions in the future, with the possibility of involving another central bank.
Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS) serves as Singapore's central bank and the country's financial regulatory body. The body governs various sectors pertaining to money, banking, insurance, securities and other financial services. MAS primarily controls currency circulation and supply in Singapore. Unlike other central banks, MAS does not control the liquidity in the system through interest rates, but does so through foreign exchange channels.
What is fintech?
Fintech revolves around any financial service that can be digitized through means of mobile apps, internet banking or platforms driven through algorithmic and robotic transactions. Many banks are now pushing for innovative banking measures across digital platforms.
The future of blockchain
Blockchain is a new technology that permits users to make online payment transactions without involving third parties. The blockchain network has all its users mapped to a shared ledger system, enabling all parties to receive copies for all the transactions. Initially, blockchain technology was used for transactions involving bitcoins and cryptocurrency, but experts have also highlighted its usage for real world money.
What are the benefits of using blockchain technology?
A plethora of banking institutions have invested in blockchain technology, with cost saving pitched at $20 billion per year. The technology does not involve any central authority, and hence removes the possibility of a single entity tampering with the data.
R3 blockchain consortium
R3 is a financial technology company, that focuses on building a database for serving blockchain requirements for various companies. The consortium has over 70 financial institutions that form the company. Headquartered in New York, it was founded two years ago by David Rutter. The company builds platforms for financial institutions that handle complex digital data, while providing the necessary restrictions for access.
Singapore's push for digital currency
"This project could potentially avail a payment system for participants to transact in different global markets round-the-clock that are today limited by time zone differences and office hours," MAS said in a statement.