MAS opts for blockchain technology to make international payments

Date: 2018-03-17   Author: Paroma Bhattacharya  Category: #technology

MAS opts for blockchain technology to make international payments

The Monetary Authority of Singapore (MAS) has partnered with Bank of Canada and is conducting tests to develop a cross border solution. Incidentally, this solution is based on the use of crypto tokens issued by the central banks of two different countries.

The collaboration plausibly comes on the heels of a recent financial industry event where Ravi Menon, Managing Director of Monetary Authority of Singapore, spoke about the potential of blockchain in international payments. In the speech, he reportedly declared his belief that the use of crypto currency can find a strong usage in facilitating cross-border settlements. He went on to add that the Singapore’s project Ubin has taken up it as a challenge to solve the use of blockchain technology and to enable its usage as a means of payment that entities across different jurisdictions can use.

The present remark is a double down on Menon’s earlier remark where he had declared that due to lack of payment, storage and accounting features, crypto tokens are not entitled to be termed as currencies. However, sources say that he seems to have left an open scope for crypto tokens by adding that just because they are not a currency now does not mean they cannot be considered a currency in the future.

Apparently, concerns had also been raised about the growing risks that are emerging in relation to the fiscal technology. The MD of MAS, in this regard, said that MAS had been watching out for areas such as money laundering, fundraising and effects of crypto tokens on overall financial stability.

The MD’s speech also reiterated the initial coin offering guidance issued for investor protection and stressed on the fact that investor protection is of immediate concern in the ongoing crypto mania. Crypto tokens may represent ownership or debt owed by the issuer, but under the Securities and Futures Act they may come to be regarded as securities. In the light of this scenario, say experts, the MAS-bank of Canada partnership is likely to recapitulate the significance of the blockchain.



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