The Monetary Authority of Singapore, Singapore’s de facto central bank, has today revealed its findings from a trial that pegged its currency to blockchain tokens.
The project, which was set up to explore the feasibility of switching to a digital currency on the blockchain, saw digital tokens issued for the first time, as well as providing a number of other insights for the bank and national regulators.
Working with Deloitte and a number of other firms in the banking and finance sectors, the bank had been developing its infrastructure on protocols from the R3 consortium.
Known as Project Ubin, the pilot got underway in November last year, and has now progressed through the first phase of testing.
With the first phase being hailed as a success, the technology will now move through additional phases of testing before a proof-of-concept is established.
It could pave the way for Singapore to ultimately switch to a digital currency, in place of its current coins and notes format. While a fully digital currency might still be some time away, the findings of the trial no doubt strengthen the cause.
Blockchain technology is regarded as being one of the most significant developments to affect finance for decades, with some commentators anticipating fundamental changes in the structures and systems that underpin global banking.
Cryptocurrencies like bitcoin already run on blockchain technology, and provide insights into how a working model of a digital currency might look.
But the Singapore trial represents one of the most advanced examples of a national currency being converted to blockchain-based tokens, and governments and central banks around the world have indicated they recognize the benefits such a switch could deliver.
According to the Monetary Authority of Singapore, there is more work to be done with Project Ubin throughout future trial phases.
“Future phases would focus on the future operating model of Project Ubin, further technical analysis, focus on securities settlement by developing DvP and Cross-border payments (PvP).”
Nonetheless, the early signs look promising for Singapore and its attempts to ultimately switch to a digital dollar.