MAS announced the launch of a global challenge for retail Central Bank Digital Currency (CBDC) solutions. Launched in partnership with the International Monetary Fund, World Bank, Asian Development Bank, United Nations Capital Development Fund, United Nations High Commission for Refugees, United Nations Development Program, and Organization for Economic Co-operation and Development, the Global CBDC Challenge seeks innovative retail CBDC solutions to enhance payment efficiencies and promote financial inclusion. Interested parties are encouraged to submit their applications for the Global CBDC Challenge by July 23, 2021. Finalists will pitch their solutions to a global audience on a Demo Day to be held at the Singapore Fintech Festival in 2021.
As part of the challenge, fintech companies, financial institutions, and solution providers worldwide are invited to submit innovative solutions that can address 12 problem statements centered on three key areas including:
- Improving and expanding the accessibility and utility of digital payments
- Mitigating risks associated with payment transfers and market infrastructure
- Providing a viable CBDC infrastructure that is low-cost, efficient, and robust and provides for trusted settlement of payment transactions among participants
The problem statements include new functionality versus inclusivity, security versus accessibility, availability versus risk of disputes, recoverability versus anonymity, widespread frictionless use versus control, personal data protection versus system integrity, expansion of access to financial services versus guarding against data monopolies, coexistence versus integration complexities, decentralization versus accountability, extensibility versus operational resilience, privacy versus performance, and interoperability versus standardization. These problem statements have been curated from suggestions received from partner organizations worldwide.
A retail CBDC built for next-generation financial rails has the potential to increase payments efficiencies, improve financial inclusion, and support the broader digitalization drive in the economy. However, the design and technology underpinning retail CBDC solutions need to meet a number of public policy objectives:
- The proposed solution should be cost effective to implement, while addressing both current and anticipated future payment needs of the consumer.
- It must be accessible to a full spectrum of users, including lower-income households and those who are less tech-savvy.
- The design of the retail CBDC solution should contribute to financial system resilience and integrity and be consistent with monetary and financial stability
The Global CBDC Challenge will be supported by Amazon Web Services, Mastercard, Partior, R3, and open source software foundations Hyperledger and the Mojaloop Foundation; the challenge will be managed by the API Exchange (APIX) and Tribe Accelerator. Up to 15 finalists will be selected to receive mentorship from industry experts and be given access to the APIX Digital Currency Sandbox for rapid prototyping of digital currency solutions. The Sandbox will offer a comprehensive test and development platform, which includes core-banking application programming interfaces (APIs) from APIX, payment APIs from Mojaloop Foundation, digital currency APIs from Mastercard, Partior, and R3, and more than 100 APIs provided via the APIX marketplace.
Keywords: Asia Pacific, Singapore, Banking, CBDC, Fintech, Global CBDC Challenge, IMF, World Bank, Asian Development Bank, United Nations Capital Development Fund, United Nation High Commission for Refugees, UNDP, OECD, Singapore Fintech Festival, APIX, API, MAS
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