Singapore recently announced that it is ready to partner with China in the space of cryptocurrencies and digital money. The Central Bank of Singapore and the country’s financial regulatory authority has given green signal to move ahead with collaboration with the Chinese counterpart in the sector of central bank digital money. The MD of MAS or Monetary Authority of Singapore, Ravi Menon, has said that the country is ready to move ahead in its cooperation with China with respect to digital currencies.
Ravi Menon, in his speech at a financial conference in Shanghai, mentioned about the progress and achievements of China in the field of the Chinese currency. He went on to highlight the leaps made by China, especially with the development of the CBDC or Central Bank Digital Currency, popularly referred to as Digital Yuan. Singapore has been in the process of developing its own blockchain-based CBDC for quite a while now. Monetary Authority of Singapore is hoping to partner with China to gain knowledge and share data to make it a reality, as reported by Sina Finance.
Menon said in the economic forum that CBDC is a trending topic at the moment, and the concerned regulatory and financial authorities of China and Singapore are discussing various scenarios with regards to CBDC development. Ravi Menon also said that the need for CBDC varies greatly from country to country. The primary reasons behind Singapore’s desire to develop CBDC are to reduce settlement time, enhance transaction security, settlement cost, and cross-border payment costs.
At the international forum, Ravi Menon also mentioned about the stablecoin project of Facebook, namely Libra. He added that it could not be denied that Libra comes across as a huge challenge for the global banking systems but also highlighted the fact that the team at Libra is flexible and committed to working closely with international partners to find a middle ground. Menon has visibly supported the Libra project of Facebook in the past. Libra encountered a range of challenges from financial regulators and government authorities after it was rolled out. The surmounting pressure on Libra even resulted in some of the association members leaving the project.
The Monetary Authority of Singapore has been working since 2016 to build an advanced blockchain technology backed interbank payment system. The MAS made the project public in the year 2018 and was officially named “Project Ubin.”It is a collective effort of the financial regulators and the central bank of Singapore to come together to build a system that helps with the settlement of securities and payments.
China has been in the cryptocurrency race for a while now and, in 2019, even raced to launch its digital Yuan before Facebook could launch its Libra project. At present, China’s CBDC is being tested in several major cities in China. Based on the feedback and the response, the experts plan to launch CBDC nationwide and are confident that it would integrate with the economy seamlessly without coming across any hiccups. It is also reported that China is planning a digital currency focused particularly on East Asia to counter the US dollar and get relief from its dependency. This digital currency, in particular, is planned to include a host of other regional currencies, which includes South Korean Won, Chinese Yuan, Japanese Yen, and Hong Kong Dollar.
The Monetary Authority of Singapore has partnered with JP Morgan and Singapore’s own Temasek to propel Project Ubin in the right direction. JP Morgan has rolled out JPM Coins, which are a blockchain version of US dollars for use in blockchain payments. Ravi Menon of MAS said while Singapore is looking forward to work with the People’s Bank of China closely, it is open to working with other international financial and banking organizations to collaborate and share blockchain technology and platform as well as include other foreign currencies on the Ubin’s network.
The collaboration between Singapore and China has been growing phenomenally in recent times as the trade between the countries has been growing massively. Singapore has become the second-largest forex trading center for RMB. The growing economic partnership between the two countries has paved the way for further collaboration on other fronts, including digital currencies, blockchain technology, and more.