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 Proposes to Amend Rulebook, Notifications Form, and SM&CR Form L
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
EBA published the annual report on asset encumbrance of banks in EU.
MAS revised the guidelines that address technology and cyber risks of financial institutions, in an environment of growing use of cloud technologies, application programming interfaces, and rapid software development.
FED updated the reporting form and instructions for the FR Y-9C report on consolidated financial statements for holding companies.
EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.