Monday, July 4, 2022
Market-Reporter
  • Home
  • Markets
    • U.S. Markets
    • Canada
    • Europe & Middle East
    • Emerging Markets
    • Asia
    • Latin America
  • Investing
    • Stocks
    • IPOs
    • Mutual Funds
    • ETFs
    • Bonds
    • Commodities
    • Currencies
    • Cryptocurrencies
  • Economy & Politics
    • Personal Finance
    • Spending & Saving
    • Retirement
    • Real Estate
No Result
View All Result
  • Home
  • Markets
    • U.S. Markets
    • Canada
    • Europe & Middle East
    • Emerging Markets
    • Asia
    • Latin America
  • Investing
    • Stocks
    • IPOs
    • Mutual Funds
    • ETFs
    • Bonds
    • Commodities
    • Currencies
    • Cryptocurrencies
  • Economy & Politics
    • Personal Finance
    • Spending & Saving
    • Retirement
    • Real Estate
No Result
View All Result
Market-Reporter
No Result
View All Result
Home Currencies

How Singapore and Cambodia see digital currencies for cross-border use

MtR by MtR
June 17, 2021
in Currencies
0

Related articles

Mahathir: Deeper currency markets have cut risk of Asian financial crisis repeat – Nikkei Asia

July 3, 2022

MMA introduces currency sign of Rufiyaa

July 3, 2022



As interest in central bank digital currencies (CBDCs) continues to grow around the world, central bankers are increasingly shifting their focus from domestic applications to cross-border use of CBDCs.

A survey of 50 central banks conducted in the first quarter of this year by the Bank for International Settlements (BIS) found that 28% of the central banks were considering options to make CBDCs interoperable at a wholesale level by forming multi-CBDC arrangements, including integrating multiple CBDCs into a single payments system. Almost 14% of the central banks said they were considering an active role in foreign exchange conversion.

The G20 has made enhancing cross-border payments a priority and CBDCs present an opportunity for central banks to improve existing international payment arrangements.

“Central bank digital currencies (CBDCs) could ease current frictions in cross-border payments — and particularly so if central banks factor an international dimension into CBDC design from the outset,” according to the BIS in a paper titled “CBDCs beyond borders: results from a survey of central banks” published this month.

See related story: 4 central banks and BIS exploring CBDC bridge for Asia and Middle East

Rethinking cross-border payments and settlements in Singapore

“With the wholesale CBDC construct, with the DLT [distributed ledger technology] construct, there is a possible opportunity to redesign the whole ledger system, especially when you are settling cross-border,” said Sopnendu Mohanty, chief fintech officer at the Monetary Authority of Singapore (MAS). He was speaking at a panel discussion on “Asia Pacific CBDC Innovation, Collaboration and the Drive to Interoperability” at the recent Hyperledger Global Forum 2021, an enterprise blockchain event.

Mohanty said that Singapore and Thailand, which linked their national real-time retail payment systems — PayNow in Singapore and PromptPay in Thailand — earlier this year after three years of work, brought down the cost of cross-border transfers between the two countries significantly by an average of 10 to 15% before, to 3% now. The remaining cost was primarily due to foreign exchange and settlement fees, and a wholesale CBDC with DLT could “make a big difference” in further reducing the cost.

 A “multi-currency multi-ledger construct definitely is the way forward”, Mohanty said.

With BIS support through its regional Innovation Hub, Singapore embarked on Project Dunbar for cross-border payments involving wholesale CBDCs. The project builds on the country’s earlier multi-year multi-phase work on Project Ubin, which explored the use of DLT and blockchain for domestic clearing and settlement of payments and securities. 

See related article: Will Singapore launch a people’s digital currency — and support DeFi?

Project Ubin, which concluded last year, saw the development of a blockchain-based multi-currency payments network prototype. The project has since moved from experimentation to commercialization with U.S. investment bank J.P. Morgan partnering with Singapore’s DBS Bank and state-owned investment company Temasek to form Partior, a technology company, to develop a blockchain-based multi-currency payments network for real-time commercial cross-border clearing and settlements globally using commercial banks digital currency.

Mohanty says he’s seen “massive growth” in the blockchain space in Singapore, with close to 200 blockchain companies in the country now solving issues around trade finance, settlement processes, bond issuance, among others, using this technology. “There are a whole set of commercial enterprises coming through not only by fintechs, also by mainstream banks, DBS and et cetera, which clearly shows that blockchain has become mainstream.”

See related article: R3 and ASEAN network partner on CBDC sandbox for banks and fintechs

“For many emerging markets, many countries who can’t afford traditional faster payment systems, traditional payment infrastructure…, they may find retail CBDC with [DLT] infrastructure a compelling argument for a switch,” Mohanty said. 

“In Singapore, I may not have a compelling argument because I can move money between two bank accounts at zero cost in three clicks,” Mohanty added. “But there are countries which still need a lot of infrastructure investment, and they can leapfrog like Cambodia.”

Digital payments in Cambodia

Serey Chea, assistant governor at the National Bank of Cambodia, also spoke at the panel discussion on Cambodia’s Project Bakong, which was built on the Hyperledger Iroha platform. 

Chea clarified that Project Bakong, while widely regarded as a CBDC due to some of its features such as its underlying technology, was intended to be a backbone payment system. “From a legal perspective it is not [a CBDC],” said Chea, adding that the Cambodian central bank did not have any direct liability to the public. 

Project Bakong is a digital payment system that allows for payments, deposits and cash transfers in a tokenized version of the Cambodian riel or U.S. dollar. According to Chea, there have been about 100,000 downloads of the Bakong wallet, with about five million users.

Chea said that one of the motivations for Cambodia’s Project Bakong was to make mobile payments cheaper by reducing regulatory compliance costs in Cambodia’s fragmented payments landscape. 

“The payment service provider doesn’t have to be a member of central clearing house as long as they have their Bakong credit, as long as their user has Bakong credit they can transfer to anyone they want because it is peer to peer,” Chea said. Chea has previously said that it could be difficult for payment service providers as technology companies to participate in the national clearing house and reach the same standard of liquidity management as banks. “It would be counterproductive as regulatory compliance cost would be passed on to end-users,” she said.

Chea sees a digital currency that can be sent across borders as “probably one of the most useful case of digitalizing of currency.” But issues around interoperability and digital identity will need to be addressed.

According to Chea, Cambodia is currently working to connect the DLT-based Bakong platform with a conventional platform from Maybank, a commercial bank in Malaysia. “There’s a lot of challenges, particularly in the digital identity, but we hope we can overcome it and launch it within this year.”




Source link

Related Posts

Mahathir: Deeper currency markets have cut risk of Asian financial crisis repeat – Nikkei Asia

by MtR
July 3, 2022
0

Mahathir: Deeper currency markets have cut risk of Asian financial crisis repeat  Nikkei Asia Source link

MMA introduces currency sign of Rufiyaa

by MtR
July 3, 2022
0

Maldives Monetary Authority (MMA) officially introduces the new currency sign for Maldivian Rufiyaa. The sign is the Dhivehi "Thaana" letter...

Hungarian forint: one of the world’s weakest currency

by MtR
July 3, 2022
0

With all the ups and (mostly) downs recently, the Hungarian forint has become one of the weakest currencies not only...

Orbán: “order and security represent Hungary’s hardest currency”

by MtR
July 3, 2022
0

Hungarians need their country “because it is the homeland that protects us from all troubles and dangers” Prime Minister Viktor...

Uzbekistan publishes guidelines for registering block reward mining businesses

by MtR
July 3, 2022
0

The National Agency for Prospective Projects (NAPP) of the federal republic of Uzbekistan, the sole digital currency regulator of the...

Load More
  • Trending
  • Comments
  • Latest

Bank of England tells ministers to intervene on digital currency ‘programming’

June 21, 2021

Tips for checking smoke alarms during daylight saving time

March 12, 2022

GLOBAL MARKETS-U.S. stocks follow Europe up; Treasury yields rise, dollar firm

July 9, 2021
Fed tapering and emerging markets

Fed tapering and emerging markets

June 7, 2021
African currencies week ahead: Zambia's kwacha seen on back foot, Kenyan shilling up – Business Recorder

African currencies week ahead: Zambia's kwacha seen on back foot, Kenyan shilling up – Business Recorder

0
Maxum Foods releases Global Dairy Commodity Update for June

Maxum Foods releases Global Dairy Commodity Update for June

0
Letter: Perpetual bonds can help states fight hunger

Letter: Perpetual bonds can help states fight hunger

0
United Kingdom ETFs Are Riding the Re-Opening Momentum

United Kingdom ETFs Are Riding the Re-Opening Momentum

0

How New Cryptocurrency Rule Will Affect You. Details Here

July 4, 2022

Meet the founders with the boomerang factor

July 4, 2022

Greater global coordination needed for AI-enhanced diagnostics, treatment to save lives of prostate cancer patients

July 4, 2022

Lila's Engraving retirement | | alexcityoutlook.com – The Alexander City Outlook

July 4, 2022

Recent News

How New Cryptocurrency Rule Will Affect You. Details Here

July 4, 2022

Meet the founders with the boomerang factor

July 4, 2022

Greater global coordination needed for AI-enhanced diagnostics, treatment to save lives of prostate cancer patients

July 4, 2022

Categories

  • Asia
  • Bonds
  • Canada
  • Commodities
  • Cryptocurrencies
  • Currencies
  • Emerging Markets
  • ETFs
  • Europe & Middle East
  • IPOs
  • Latin America
  • Mutual Funds
  • Personal Finance
  • Real Estate
  • Retirement
  • Spending & Saving
  • Stocks
  • U.S. Markets
  • Privacy & Policy
  • About Us
  • Contact Us
  • Advertise with us

© 2021 Copyright Market-Reporter

No Result
View All Result
  • Home
  • Markets
    • U.S. Markets
    • Canada
    • Europe & Middle East
    • Emerging Markets
    • Asia
    • Latin America
  • Investing
    • Stocks
    • IPOs
    • Mutual Funds
    • ETFs
    • Bonds
    • Commodities
    • Currencies
    • Cryptocurrencies
  • Economy & Politics
    • Personal Finance
    • Spending & Saving
    • Retirement
    • Real Estate

© 2021 Copyright Market-Reporter