Singapore’s Monetary Authority Offers Cash Prizes to Test New Retail CBDC Solutions
Singapore’s central bank wants fintech companies to proffer methods to create an ideal central bank digital currency (CBDC). The central bank, which doubles as the country’s financial regulator, made its intentions known today via a press release announcement. The apex bank wants the FinTech firms to develop a CBDC solution that will promote financial inclusion and payment effectiveness.
The MAS Offers a Monetary Reward to FinTech Companies
As an encouragement, the monetary authority of Singapore (MAS) is set to reward the companies whose solutions are among the top three with about $38,000 (or 50,000 Singapore). Apart from the cash prize, these top three firms will have access to an international audience where they can pitch their solutions. The MAS will also collaborate with the top 15 firms to help them develop better digital currency solutions faster.
Singapore is partnering with the United Nations Development Program, the United Nations Capital Development Fund, the Asian development bank, the World Bank, the International Monetary Fund (IMF), and other leading global financial institutions to launch this challenge.
This initiative’s other financial supporters include tribe accelerator (a blockchain accelerator company in Singapore), Hyperledger, the Mojaloop foundation, R3, Amazon Web Services (AWS), and payment heavyweight MasterCard. Those backers mentioned above will also provide an APIX crypto sandbox (a platform with an emphasis on digital currency) that these FinTech companies can use to properly test and develop banking and other payment solution APIs.
Part of the announcement states that any FinTech company or institution from any part of the world can apply for the challenge. Sopnendu Mohanty, the Chief FinTech Officer for MAS, remarked that the challenge aims to amass suitable solutions for various CBDC-related policy and technology issues.
He said, “MAS wants to positively incite innovative ecosystems globally to create and display solutions that optimize CBDC’s capabilities to proffer effective solutions for better financial inclusion, payment services, and other aspects of monetary stability that align with the central bank’s ideals.”
Singapore Now a Top Player in The Crypto Development
Singapore is now a top player in cryptocurrency development as it continues to penetrate the crypto industry, especially CBDC. The MAS is exploring a wholesale CBDC and not a retail CBDC because it believes its current payment system is fast and cheap already. Last year, DBS private bank established an entire crypto exchange division, and last month, it inaugurated its crypto trust solution.
More countries adopt CBDCs
More financial regulators are adopting CBDCs. Late last year, European Central Bank (ECB) President Christine Lagarde revealed that Europe’s apex bank would launch its CBDC within four years. Mohanty further said, “most financial regulators exploring the possibility of a CBDC face various challenges in terms and policy and technology. We have identified our issues and are using this initiative to seek solutions to them.”
Despite massive adoption of CBDCs by most countries’ central banks, a swiss central bank economist, Mr. Carlos Lenz, has argued that blockchain technology isn’t suitable for CBDC development.
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