Singapore’s Central Bank to Conduct Test on Settlements with Wholesale CBDC
Singapore’s central bank recently announced a pilot program for a live wholesale central bank digital currency (CBDC) based on the Singapore dollar.
This new CBDC would be used by local banks to settle payments instantly.
During the Singapore Fintech Festival on November 16, MAS Managing Director Ravi Menon stated:
“I am pleased to announce that MAS will pilot the ‘live’ issuance of wholesale CBDCs to instantaneously settle payments across commercial banks.”
Previously, the MAS had only simulated the issuance of a CBDC in test environments, but now they plan to partner with Singaporean banks to test the use of a CBDC as a settlement asset for domestic payments.
Under the pilot program, banks will issue tokenized liabilities that represent claims on their balance sheets.
These tokenized liabilities can then be used by retail customers to transact with merchants. The settlement for these transactions would occur through an automatic transfer of the wholesale CBDC.
