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 ArticleFSB Designates DSB as Unique Product Identifier Service Provider
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.
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.
EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).