Singapore Plans To Pilot Wholesale Central Bank Digital Currencies In 2024

In a significant move towards the digitization of currency, Singapore’s central bank, the Monetary Authority of Singapore (MAS), plans to test the live usage of wholesale central bank digital currencies (CBDCs) in 2024.

What Happened: The announcement was made by MAS’s Managing Director, Ravi Menon, at the Singapore FinTech Festival 2023 as reported by CNBC.

“We will take our experiments a step further next year,” Menon stated, without revealing a specific timeframe.

Wholesale CBDCs differ from retail CBDCs as they are used primarily by central banks and other financial institutions to settle large-value transactions. MAS has been exploring the use of such digital currencies on distributed ledgers for real-time, cross-border payments since 2016.

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Project Ubin, an initiative started in 2016, was one of the key MAS projects aimed at leveraging blockchain and digital ledger technology for payment clearance and securities settlement. Following its success in 2021, MAS announced Ubin+, an effort to enhance cross-border connectivity using wholesale CBDCs.

Menon, who has helmed MAS since 2011, will retire at the end of this year, with Chia Der Jiun taking over.

Why It Matters: This move by MAS aligns with the global trend towards the adoption of CBDCs. Before Menon’s announcement, IMF Managing Director Kristalina Georgieva advocated for faster adoption of CBDCs to improve slow and costly cross-border payments at the same festival. She highlighted the potential of CBDCs to advance financial inclusion in regions with low bank account ownership.

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