MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype. This phase of Project Ubin highlighted commercial potential, paving a way toward live adoption. The report provides technical insights into the prototype that was built and describes how the network could benefit the financial industry and blockchain ecosystem. The payments network prototype, developed in collaboration with J.P. Morgan and Temasek, can serve as a test network to facilitate collaboration with other central banks and the financial industry for developing next-generation cross-border payments infrastructure. Project Ubin is a collaborative project with the industry to explore the use of Blockchain and Distributed Ledger Technology (DLT) for clearing and settlement of payments and securities.
The report, which Accenture was commissioned to publish, examines the use of blockchain technology in commercial applications across different industries and how these applications could benefit from integrating with the developed blockchain-based payments network prototype. The benefits were validated through workshops conducted with more than 40 financial and non-financial firms engaged in Phase 5 of Project Ubin. The report describes the key features of the Ubin V network and blockchain blockchain use cases, explaining the benefits of the functionalities provided by the Ubin V network. Through an initial secondary research, the project team identified 124 projects with use cases that were deemed interesting and that would potentially benefit from integration with Ubin V. From this pool, 16 were selected for further exploration. The 16 use cases are broadly categorized into four areas: capital markets, trade and supply chain finance, insurance, and beyond financial services. The final part of the report describes design ideas and concepts for a payments infrastructure of the future, with a retrospective view of how some of these design concepts could be applied to payment architectures. The following are the key findings of the report:
- The multi-currency payments network prototype developed under Project Ubin Phase 5 successfully settled payments in different currencies on the same network. An international settlement network, modeled after this payments network prototype, could enable faster and cheaper transactions than conventional cross-border payments channels.
- Project Ubin Phase 5 validated the use of smart contracts on the payments network prototype in use cases such as Delivery-versus-Payment settlement with assets on private exchanges, conditional payments, and escrow for trade as well as payment commitments for trade finance.
- The commercial applications of the payments network prototype include cross-border payments in multiple currencies and foreign-currency exchange, settlement of foreign currency denominated securities, and integration with other blockchain-based platforms to enable end-to-end digitalization across many industries and use cases.
Project Ubin is a multi-year, multi-phase project, with each phase aimed at solving the pressing challenges faced by the financial industry and the blockchain ecosystem. Phase 5 was designed to test this hypothesis and understand the broad opportunities and benefits from integration with the Ubin V network. Phase 5, which was the final experimental phase of Project Ubin, focused on proving value and building a foundation for future live pilots and trials by the industry. In continuing the work done in Phase 4, it successfully developed a blockchain-based multi-currency payments network that enables payments to be conducted in different currencies on the same network. Although it is still a prototype test network, it was developed to be production-ready.
Keywords: Asia Pacific, Singapore, Banking, Insurance, Fintech, Blockchain, Project Ubin, Phase 5, DLT, Regtech, Payments Prototype, MAS
Previous ArticlePRA to Partly Apply EBA Guidelines on Disclosures for COVID Measures
BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.
The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.
HKMA, together with the Banking Sector Small and Medium-Size Enterprise (SME) Lending Coordination Mechanism, announced a ninety-day repayment deferment for trade facilities under the Pre-approved Principal Payment Holiday Scheme.
The Advisory Scientific Committee of ESRB published a response, in the form of an Insights Paper, to the EBA proposals for reforms to the stress testing framework in EU.
MAS announced several initiatives to support adoption of the Singapore Overnight Rate Average (SORA), which is administered by MAS.
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.
PRA published the policy statement PS19/20 on the final policy for extending coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balance.
EBA published the final draft implementing technical standards for disclosures and reporting on the minimum requirements for own funds and eligible liabilities (MREL) and the total loss-absorbing capacity (TLAC) requirements in EU.
EBA published an erratum for the phase 2 of technical package on the reporting framework 2.10.
EC published the Implementing Regulation 2020/1145, which lays down technical information for calculation of technical provisions and basic own funds.