Blockchain technology has often been referred to as a great way of facilitating interbank payments, through private digital currencies. According to recent reports, it seems like the Monetary Authority of Singapore will become the newest central bank to launch its trial, blockchain-based system meant for carrying out interbank payments.
The project reportedly also involves a total of eight banks alongside with the city’s stock exchange, and its main purpose is to simplify the payment process with bitcoin, while also reducing transaction costs. Not only this, but this FinTech concept is likely to also include cross-border transactions, made possible by the participation of another central bank in the foreseeable future. According to the Managing Director of the Monetary Authority of Singapore, Ravi Menon, “Today, banks have to go through correspondent banks to intermediate these payments. It takes time and adds to cost (…) this project marks the first step in MAS’s exploration of ways to harness the potential of central bank-issued digital currency.”