JPMorgan, Temasek and the Monetary Authority of Singapore (MAS) have jointly developed a blockchain-powered cross-border payments system that is capable of making payments across a broad range of currencies on the same network. MAS, Singapore’s central bank, announced that the prototype network has the potential to improve cost efficiencies for businesses, and is currently undergoing industry testing to gauge its ability to connect with commercial blockchain applications.
MAS further added that commercial blockchain applications that proved to be successful in its testing with the prototype network will be showcased at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019.
The blockchain-based prototype payments system is developed as part of the ongoing Project Ubin initiative, which saw the participation of investment banking multinational JPMorgan and Singaporean investment company Temasek. With the successful development of the MAS-led prototype, this marks the latest achievement and milestone for Project Ubin, which is currently in its fifth phase. Beyond technical experimentation, Project Ubin’s fifth phase will also decide the value and commercial feasibility of the blockchain-powered payments network. So far, MAS and its partners have engaged more than 40 financial and non-financial companies and firms to explore the network’s potential benefits.
Project Ubin is a collaborative effort between MAS and financial industry players to assess the use of blockchain and distributed ledger technology for payments and securities systems. Building on the work of the preceding phase 4 of the Project Ubin initiative, the prototype network will provide interfaces that enable other blockchain networks to integrate and interoperate efficiently and seamlessly. Additionally, the network will also provide supportive use-case features such as settlement with private exchanges, conditional payments and escrow for trade, delivery-versus-payment (DvP) and payment commitments for trade finance.
Project Ubin has been ongoing for quite some time, with the second phase of the project announced 2 years ago in 2017. Earlier tests of the initiative saw the participation of Deloitte, a multinational professional services firm that is one of the “Big Four” accounting organizations, and blockchain startup-consortium R3. The project originally focused on digitizing Singapore’s dollar with blockchain technology, but has since progressed to examining the technology’s usefulness in supporting a real-time gross settlement system similar to those used by central banks.
“There is growing evidence now that blockchain-based payments networks are able to enhance cost efficiencies and create new opportunities for businesses. We hope this development will encourage other central banks to conduct similar trials, and we will make the technical specifications publicly accessible to accelerate these efforts. We look forward to linking up with more blockchain networks to improve cross-border connectivity. This will be a big step forward in making cross-border transactions faster, cheaper, and safer,” said Sopnendu Mohanty, chief fintech officer at MAS.
Chia Song Hwee, president and chief operating officer at Temasek, added: “Blockchain technology has great potential in transforming businesses and opening up new business opportunities. To better understand the impact and value of blockchain technology, we are pleased to have partnered with MAS and J.P. Morgan for the Ubin platform.”
John Hunter, global head of clearing and Interbank Information Network (IIN) at JPMorgan, said: “JPMorgan is excited to be an infrastructure partner of MAS and Temasek for Phase 5 of Project Ubin. By leveraging our key learnings from building the Interbank Information Network (IIN) and the JPM Coin, JPMorgan is well-positioned to support the development of a blockchain-based payments network and operate at scale.”
Multinational professional services company Accenture has been commissioned to publish the project report in early 2020, listing the potential blockchain use cases that would benefit from a blockchain-powered payments network, as well as setting out additional features that the network could provide. What’s more, the technical specifications for the platform’s connectivity interfaces will also be made publicly available under the Apache License Version 2.0.
Project Ubin’s inclusion of non-financial services companies has demonstrated the applicability of blockchain technology beyond just capital markets and trade finance. All involved parties look forward to deeper collaboration and support for Singapore’s forward-thinking efforts in the blockchain space.
