The Monetary Authority of Singapore (MAS) has released a proposal for a common protocol that would specify the conditions for the use of various types of digital currencies.
On June 21, MAS published a white paper that covers technical specifications outlining the lifecycle of its new Purpose Bound Money (PBM) concept, along with the names of financial institutions and fintech firms that plan to pilot it.
PBM plans to enable senders of digital currencies across different systems, such as central bank digital currencies (CBDCs) or stablecoins, to be able to specify conditions of digital currency transactions, including a validity period and types of shops.
Sopnendu Mohanty, the chief fintech officer of MAS, commented that these recent developments had enhanced the role of digital currencies in the future financial landscape.
“This collaboration among industry players and policymakers has helped achieve important advances in settlement efficiency, merchant acquisition, and user experience with the use of digital money.”
The paper was developed in collaboration with the International Monetary Fund, Banca d’Italia and Bank of Korea, among other financial institutions. Fintech firms implementing a trial of PBM include Amazon, DBS and Grab.
Amazon will specifically trial escrow-like arrangements for online retail payments. It will entail the merchant receiving payment only when the customer receives the items purchased.
Additionally, the white paper encourages central banks, financial institutions and fintech companies to conduct more research for digital money use cases.
This comes as Singapore continues to embrace crypto-related businesses and activity. On June 7, Circle, the issuer of the USD Coin (USDC) stablecoin, joined other major payment institutions in receiving a license in Singapore.
A few days prior, Crypto.com also received its license from MAS for digital payment token services.