MAS and Bank of Canada conducted a successful experiment on cross-border and cross-currency payments using central bank digital currencies. This is the first such trial between two central banks and has great potential to increase efficiencies and reduce risks for cross-border payments. Following the successful conclusion of the project, the Bank of Canada and MAS have jointly published a report titled “Jasper-Ubin Design Paper: Enabling Cross-Border High Value Transfer Using Distributed Ledger Technologies.”
The joint report by Bank of Canada and MAS describes how the Jasper and Ubin prototype networks, developed on different blockchain platforms, were able to inter-operate, allowing for cross-border payments to be settled on central bank digital currencies, which, in turn, enables greater efficiencies and reduces risks. The report describes the technical implementation of Hashed Time-Locked Contracts (HTLC) and highlights possible limitations and challenges with the implementation model. The report further suggests areas of research in Distributed Ledger Technology (DLT) inter-connectivity mechanisms and alternative network models. This represents opportunities for further collaboration among central banks, financial institutions and fintech firms.
The Bank of Canada and MAS collaborated in the use of DLT and central bank digital currencies to make the cross-border payment process cheaper, faster, and safer. The two central banks have successfully linked up their respective experimental domestic payment networks, namely Project Jasper and Project Ubin, which are built on two different DLT platforms. The project teams used a technique called HTLC to connect the two networks and allow Payment versus Payment (PvP) settlement without the need for a trusted third party to act as an intermediary. The Jasper-Ubin project was carried out in partnership with Accenture and J.P. Morgan, who supported the development of the Canadian network on Corda and the Singapore network on Quorum, respectively.
Keywords: Asia Pacific, Americas, Singapore, Canada, Banking, Cross-Border Payments, Project Jasper, Project Ubin, Fintech, Blockchain, Distributed Ledger Technology, Bank of Canada, MAS
Previous ArticleEP Examines Policy Options to Improve Legal Certainty for Blockchain
Next ArticleRBI Amends Large Exposures Framework for Banks
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.