Singapore will conclude its experiment with blockchain technology and its own digital currency next year before deciding whether to commercialize the trial, the country’s regulator has told CNBC.
In 2016, the Monetary Authority of Singapore (MAS) announced “Project Ubin,” an exploration of blockchain or distributed ledger technology.
The project is split into five phases. The first, which looked at establishing a proof-of-concept design to conduct inter-bank payments using blockchain technology, was completed earlier this year. The second phase, which finished earlier this month, saw the development of three different models for inter-bank payments using blockchain.
Now, the MAS trial is looking at delivering securities, cross border payments and, finally, using a digital version of the Singapore dollar to carry out real transactions and buy assets.
“I hope next year we will be done with all the elements,” Sopnendu Mohanty, chief fintech officer at MAS, told CNBC by phone Thursday.
Several major banks, including Bank of America Merrill Lynch, Citi and Credit Suisse, are involved in the project.
Mohanty said this is a way to “bring the broader ecosystem together so we all learn together.”
The MAS fintech chief did not say how the experiment could affect regulation around digital currencies, or whether it would end up in a commercial product. Instead, the hope is to show other regulators that experimenting with new technology is positive.
“Don’t fear doing experiments and don’t fall into traps of signaling policy changes. Some regulators are afraid to do experiments because of this tremendous external pressure on them. We are trying to drive that culture globally,” Mohanty told CNBC.
Interest in digital currencies like bitcoin has risen sharply this year. Many regulators are looking into how to handle the rise of cryptocurrencies. China, for example, has banned cryptocurrency exchanges, while Japan has allowed bitcoin to be accepted as a method of payment.
Countries are also looking into issuing their own digital currency like Singapore. Estonia said it is looking into launching its own cryptocurrency.