The Monetary Authority of Singapore (MAS) is planning a pilot program where it would issue a “live” central bank digital currency (CBDC) for wholesale interbank settlement next year, according to a Nov. 16 statement.

“The first pilot will involve the use of ‘live’ wholesale CBDC to settle retail payments between commercial banks,” MAS said. “Future pilots could include the use of ‘live’ wholesale CBDC for the settlement of cross-border securities trade.”

MAS Managing Director Mr. Ravi Menon emphasized that the issuance of wholesale CBDC reinforces the pivotal role the central bank plays in facilitating secure and efficient payments. He said:

“The ‘live’ issuance of central bank digital money for use as a common settlement asset in payments is a significant milestone in MAS’ digital money journey that began in 2016. The issuance of wholesale CBDC reinforces the role that central bank money plays in facilitating safe and efficient payments.”

Meanwhile, the development is part of three initiatives that would ensure the safe and innovative use of digital money in Singapore, which includes the Orchid Blueprint and digital money trials.

Singapore’s digital money initiatives

The Orchid Blueprint is an initiative designed to foster the innovative application of digital currency within the country by delineating the necessary technological framework to facilitate Singapore’s adoption of digital currency.

This blueprint builds upon insights from the Project Orchid industry trials, focusing on promoting wholesale CBDCs, tokenized liabilities, and regulated stablecoins.

Under the digital money trials, the authorities would test the broad applicability of Purpose Bound Money (PBM) and digital money in Singapore, with the MAS expanding its trials into tokenized bank liabilities, wallet interoperability, supplier financing, and institutional payment controls.

These trials involve retailers and traditional financial entities like the Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB). Other participants include Ant International, Fazz and Grab, Amazon, HSBC, and J.P. Morgan.