Monetary Authority of Singapore issues a global challenge for new retail CBDC solutions
Central bank digital currencies, or CBDCs, could become a reality in a number of countries, including Singapore. The Monetary Authority of Singapore, the country’s central bank and one of the main financial regulators, has approved challenging FinTech companies to elaborate new retail CBDC solutions.
A project supported by many institutions
Making the CBDCs a dream to come true is what the Monetary Authority of Singapore (MAS) aims at, according to its recently published report. In it, the MAS encourages startups and other companies specializing in crypto to go off the beaten track and find new solutions for retail CBDCs.
The new project’s goal is to collect offers from FinTech enterprises that will allow upgrading payment efficiency as well as advancing financial inclusion. In order to stimulate the participation, the MAS intends to propose cash prizes to the winners. The first three places will each receive Singapore $50,000 (~£26,843). In addition, up to 15 finalists will benefit from expert advice on improving the projects for developing solutions for digital currencies.
In an effort to arrange the competition, the MAS is set to cooperate with many other world financial institutions, such as the Inter1national Monetary Fund (IMF), the World Bank, the Asian Development Bank (ADB), the UN Capital Development Fund (UNCDF), the UN Development Programme (UNDP) etc.
Other major players of the industry have also followed suit. The project was supported by MasterCard, Amazon Web Services, R3, Hyperledger and the Mojaloop Foundation. Other FinTech companies that aspire to join the competition are to apply by 23rd July 2021.
Singapore, major player in the development of the CBDCs
Whilst discovering new CBDC solutions is the main goal of the challenge launched by the MAS, it’s not the only one, presumes Sopnendu Mohanty, Singapore’s chief fintech officer.
According to Mohanty, “The MAS intends to encourage innovative communities worldwide to develop and demonstrate solutions apt to maximize the potential of the CBDC, thus enhancing financial inclusion and the efficiency of payment services, in accordance with the core monetary stability mandate of central banks”.
There is little doubt that the MAS has become a major player in the digital currency development in recent years. The country has been working on discovering a wholesale CBDC solution. However, last year the MAS stressed the lack of strong demand for retail CBDCs compared to the wholesale option, and decided for now to focus exclusively on retail central bank currencies.
At the same time, a banking giant, DBS Private Bank, has launched a digital currency solution in May 2021. Earlier, it had established a division for developing a solution for cryptocurrency exchanges.
The Monetary Authority of Singapore has launched a new initiative aiming to find and develop new CBDC solutions. The challenge inviting different crypto companies will kick off soon.