MAS suggests digital money standards through whitepaper
The paper includes technical specifications detailing the entire lifecycle of purpose bound money.
The Monetary Authority of Singapore (MAS) has proposed the calibre to which digital money – central bank digital currencies (CBDCs), tokenised bank deposits, and stablecoins on a distributed ledger – should be monitored.
The published whitepaper was backed by software prototypes showcasing Purpose Bound Money (PBM).
PBM allows senders to set conditions, like validity period and shop types, for transfers in digital money across various systems.
Alongside MAS, the International Monetary Fund (IMF), Banca d’Italia, Bank of Korea, other financial institutions and fintech firms contributed to the paper.
The paper includes technical specifications detailing the entire lifecycle of PBM, from issuance to redemption, as well as the protocol for interacting with the underlying digital currencies.
The PBM protocol is specifically designed to be compatible with various ledger technologies and forms of money.
It allows users to utilise their preferred wallet provider to access digital money. By implementing a common protocol, a single infrastructure can be utilised for multiple use cases.
Stakeholders, regardless of their chosen wallet providers, can transfer digital assets to each other seamlessly without the requirement for customisation.
To test the utilisation of PBM, financial institutions and fintech firms are conducting trials in different circumstances such as online commerce and programmable rewards.
The PBM whitepaper, based on MAS' Project Orchid, encourages research collaboration among central banks, FIs, and fintechs to explore digital money design considerations.
Today, PBM source codes and software prototypes developed under Project Orchid were publicly released, showcasing how PBM can be utilised in escrow arrangements as a reference model to foster interoperability.
This enables policymakers, businesses, and FIs to utilise open-source codes and prototypes for their experiments and research.