Singapore May Have Its Own Cryptocurrency by Next Year

Singapore may have its own digital currency by next year when the fifth and final phase of the Project Ubin is completed. The project, which is initiated by the MAS, focuses on a blockchain-based network to support interbank transactions.

Sopnendu Mohanty, chief fintech officer at the Monetary Authority of Singapore (MAS), revealed yesterday to CNBC that Singapore may complete its Project Ubin by next year. The project involves the analysis of blockchain technology and a state-issued digital currency.

The regulator’s representative said that after the trial is completed, MAS will decide whether to commercialize it or not.

Project Ubin started in 2016 as a blockchain-oriented system for interbank transfers. The project is relying on the Ethereum network and is divided into five phases, of which two have already concluded.

The first phase aimed to set a blockchain-based proof-of-concept plan for interbank payments, while the second, which was completed this month, assessed three approaches for interbank payments. 

One of the primary goals during the following stages of the project is a cryptocurrency version of the Singapore dollar, which will be used to conduct trades and purchase of securities and other assets.

FinTech chief Mohanty said:

“I hope next year we will be done with all the elements.”

He added that the project was a good opportunity to “bring the broader ecosystem together so we all learn together,” as more financial institutions, such as Citi Bank, Bank of America, and Credit Suisse, also take part in the experiment.

Recently, the Monetary Authority of Singapore shared that it didn’t intend to regulate cryptocurrencies, and only wants to monitor their circulation in order to prevent risks.

Ravi Menon, the Head of MAS, said then:

“It is a known fact that cryptocurrencies are quite often abused for illicit financing purposes. And so we do want to have anti-money laundering controls, countering the financing of terrorism controls in place.”

However, the regulator’s FinTech head didn’t unveil information on how Project Ubin could influence the bank’s position on cryptocurrency regulation. At this point, the experiment is propitious to demonstrate other regulators that blockchain is not a bad thing. 

“Don't fear doing experiments and don't fall into traps of signaling policy changes. Some regulators are afraid to do experiments because of this tremendous external pressure on them. We are trying to drive that culture globally,” Mohanty said.

If Singapore ends up with its own currency, it will not be the first country to do so. Russia recently announced plans to develop its state-controlled cryptocurrency, while Spain and Canada are already working towards nationwide blockchain networks. Ukraine may join the trend too, with a national blockchain ecosystem supported by the state.