The Monetary Association of Singapore (MAS) has published a paper on its digital money protocol. The nation suggests a uniform standard outlining the prerequisites for using digital currencies. These include the use of stablecoins, tokenized bank deposits, and central bank digital currencies (CBDC). JPMorgan, Amazon, the International Monetary Fund (IMF), DBS Bank, and the central banks of South Korea and Italy are a few of the contributors to the new CBDC and digital money standards.
Major banks and investors continue to place bets on the trade and transfer of digital assets, despite regulatory scrutiny. Therefore, the MAS suggests a uniform standard for the use of digital money. The MAS’s paper talks about the concept of Purpose Bound Money (PBM). Senders will be able to define conditions, such as the validity period and stores, while sending digital currency.
The paper is a component of Project Orchid, which is a partnership between the MAS and business partners. The project aims to develop the fundamental platforms and infrastructure for using digital money. Moreover, it describes the PBM lifecycle from issue to redemption and the protocol to communicate with the supporting digital currencies. The PBM protocol allows users to transfer digital assets and access digital money using their preferred digital wallets. This is thanks to its compatibility with several ledger technologies and various kinds of money.
Is JPMorgan changing its stance on CBDCs?
It’s ironic that only a few weeks ago, the Former Minister of Finance of Greece said that JPMorgan and other banks view CBDCs as a threat. However, it is possible that large banks would like to chip in on how to use and regulate digital currencies, as that would give them a bigger say in their workings.
The Chief FinTech Officer at the MAS, Sopnendu Mohanty, stated, “This collaboration among industry players and policymakers has helped achieve important advances in settlement efficiency, merchant acquisition, and user experience…”
He further said that the collaboration “has enhanced the prospects for digital money becoming a key component of the future financial and payments landscape.”
JPMorgan, Amazon, and others are beginning trials to test the PMB protocol for CBDCs, tokenized funds, and stablecoins.