The blockchain consortium in Singapore has received a lot of positive attention Especially the central bank is quite keen on this new technology right now. With a few projects being developed and thoroughly tested, it was time to present them to the public. The source codes of three DLT prototypes have been released earlier this week. Their main purpose is to promote inter-bank payments. It is a somewhat surprising turn of events to see these projects being open-sourced at this stage.
The Monetary Authority of Singapore and the Association of Banks have embraced blockchain technology. This initiative has been going on for quite some time now. Project Ubin is the most prominent venture in this regard. It is designed to see how DLT technology can be used in the payments and securities industry. There is also a strong focus on tokenizing the Singapore dollar. Three different projects have been created to accommodate these requests.
A new Blockchain Template for Banks
It is evident there will be additional blockchain projects in the future. This has been communicated last month, although few specific details were unveiled. Project Ubin is one of the first ventures to implement decentralized netting of payments. At the same time, there is no transaction privacy risk. With the three prototypes now open to the public, an interesting future lies ahead. Technical documentation of all projects is also made available. A smart yet interesting decision by the central bank.
MAS Chief Fintech Officer Sopnendu Mohanty states:
“Open-sourcing these prototypes will encourage other central banks to conduct similar trials and engender further development on domestic inter-bank payments. We aim to link up such DLT-based systems in the future for improved cross-border connectivity. This is our contribution to the global financial ecosystem, and a step towards developing cheaper, safer and more efficient cross-border payments.”
How the public will respond to these prototypes, remains to be seen. The main purpose is to encourage academics and central banks to reuse this code for internal testing purposes. Whether that will happen, remain a big unknown for the time being. Then again, a lot of financial institutions have shown an interest in distributed ledger projects. With an existing and working solution readily available as a template, things may be accelerated all over the world. An interesting future lies ahead for blockchain, that much is evident.
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