MAS to test purpose-bound digital SGD
This can be used in government and commercial vouchers, amongst others.
The Monetary Authority of Singapore (MAS) will be conducting a few trials to explore the concept of purpose-bound money (PBM) which can be potentially used commercially and in government transactions.
In a statement, MAS said PBM will allow senders to specify conditions including validity period and types of shops when transferring digital SGD.
One of the trials will involve government vouchers as the 2022 Singapore FinTech Festival (SFF 2022) wherein DBS Bank and the GovTech’s Open Government Products Division will try it for disbursements to selected individuals, The RedeemSG vouchers can be used by the participants in participating food and beverage outlets.
For commercial vouchers, Temasek, Fazz Financial Group, and Grab will be issuing PBD as commercial digital vouchers to SFF 2022 participants which can be used in their preferred wallet applications to buy at the participating merchants at the event.
OCBC and the Central Provident Fund Board will also pilot test the PBM for funds disbursement from government agencies without the need for the recipients to have a bank account.
The United Overseas Bank and SkillsFuture Singapore (SSG) will be testing the PBM to improve the current SSG Credit disbursement process that will allow grants to be released automatically to participating training providers if they meet eligibility conditions.
“The introduction of e-money provided the ability to store value electronically and carry it with us. Digital currencies, go beyond that, allowing money to be programmed and used for specific purposes only,” said MAS Chief FinTech Officer Sopnendu Mohanty.
“Through practical experimentation with the industry, we sharpened our understanding of the potential uses of a digital Singapore dollar and the infrastructure required to support it. We look forward to collaborating further with industry participants and policymakers in subsequent phases of Project Orchid,” he added.
The trial is the first phase of Project Orchid which aims to establish the technical capabilities and competencies for the rollout of retail Central Bank Digital Currency (CBDC) if the need occurs.
Meanwhile, MAS said the assessment for the case of a retail CBDC in Singapore, the digital equivalent of notes and coins it issues, “is not compelling for now.”
Despite this, the Authority said it is actively exploring the “good uses cases for digital currencies.