Financial authorities in Singapore and the U.S. will launch a joint project to explore cross-border payments using wholesale central bank digital currencies (CBDC).
The Monetary Authority of Singapore (MAS) announced the launch of Project Cedar Phase II x Ubin+, a collaboration between the agency and analysts from the New York Innovation Center (NYIC) of the Federal Reserve Bank of New York.
The collaboration is aimed at exploring the potential of wholesale CBDCs. Regulators in the two countries seek to improve the efficiency of cross-border payments using the state’s digital currencies.
Project Cedar Phase II x Ubin+ highlights the concept of “interoperability,” which was derived by Leong Sing Chiong, Deputy Managing Director at MAS. The concept is to develop wholesale CBDCs in such a way that they are initially interoperable while “maintaining each network’s autonomy.”
Project Cedar Phase II x Ubin+ has no direct policy or conceptual goals, and its successes don’t guarantee inevitable decisions about CBDC issuance in the United States, according to Michelle Neal, NY Fed Executive Vice President and Head of Markets.
For its part, the Monetary Authority of Singapore plans to create a crypto hub in the country, specializing in instant settlement, tokenized assets, and programmable money. This was announced by Ravi Menon, Governor of the Central Bank of Singapore, during a speech at Hong Kong FinTech Week.
MAS is also actively exploring distributed ledger technology (DLT) in Singapore. For example, the government’s Project Orchid initiative is exploring retail CBDC issuance, while Project Guardian is looking at the economic potential and scenarios for asset tokenization. Singapore is also directly involved in Project Mariana, an initiative of the Bank for International Settlements (BIS) designed to examine the use of DeFi protocols for cross-border CBDC payments.
