As part of the distributed ledger technology (DLT) projects being pursued by both banks, the Monetary Authority of Singapore (BAS) sent funds to the Bank of Canada (BoC) without a third party.
The process was made possible by linking up two DLT networks: MAS’ nascent Project Ubin platform and BoC’s Project Jasper.
“The next wave of central bank blockchain projects can make further progress by bringing technology exploration together with policy questions about the future of cross-border payments,” MAS chief fintech officer, Sopnendu Mohanty, commented in the press release. He added:
“It is challenging work, and we welcome other central banks to join us in this global collaboration, to bring benefit to consumers, businesses and the broader financial industry.”
As with other bank-initiated blockchain payments schemes at various stages of development worldwide, cost-cutting and efficiency lay at the heart of the central bank trade, which the participants claim is the first to be completed successfully.
MAS and BoC subsequently released a summary report in which they discussed the merits of the joint network bridge.
“In our tests, no other action would proceed if any action fails, thus ensuring the end to end consistency of a transaction,” it reads. The summary stated:
“In the correspondent banking method of payment, the sender and receiver trust the correspondent bank. In this DLT-based system using HTLC, trust will still be required, albeit in the technical system rather than in a third party.”
MAS had previous eyed 2020 as a potential timeframe for Project Ubin to begin delivering tangible results.