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Singapore eyes blockchain-based payment systems for faster cross-border transactions

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The Monetary Authority of Singapore is exploring blockchain-based payments solution to solve the challenges in cross-border transactions. 

See related article: Singapore warms up to crypto industry — on its own terms

Fast facts

  • The current state of cross-border payments “is slow, costly, opaque, and inefficient, relying on an archaic network of correspondent banks,” Ravi Menon, the central bank’s managing director, said in his keynote speech at Sibos 2022 on Monday.
  • According to Menon, cross-border payments can be improved by connecting faster payment systems, a multi-central bank digital currency (CBDC) platform and through the expansion of private sector blockchain-based payments networks.
  • Tokenized bank deposits issued by the private sector or securely-backed stablecoins, can also be used for cheaper and faster cross-border payments and settlements, Menon said at the SWIFT-organized event. 
  • “Unlike private cryptocurrencies, whose prices fluctuate wildly, these digital currencies are suitable as payment instruments on distributed ledgers as they combine the advantages of tokenization with the reliability of fiat currencies,” Menon said.
  • Wholesale CBDCs can be used on distributed ledgers to support simultaneous settlements, according to Menon.
  • Menon said in August that the central bank is more in favor of wholesale CBDCs, or those restricted to use by financial institutions.

See related article: Singapore wants to bring some adult supervision to crypto

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