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FinTech Gains: Singapore & Indian State Foresee Blockchain Cross-Border Payments

Last Updated March 4, 2021 5:00 PM
Samburaj Das
Last Updated March 4, 2021 5:00 PM

A senior Singapore central bank has called blockchain technology “a natural form of collaboration” between Singapore and the Indian state of Andhra Pradesh.

Speaking at a blockchain conference in India, Singaporean central bank managing director Ravi Menon underlined cross-border transactions as the “killer app” for blockchain technology while talking up the ongoing FinTech collaboration between Singapore and the Indian state of Andhra Pradesh.

The Monetary Authority of Singapore, the country’s central bank and financial authority, co-signed a ‘FinTech Cooperation Agreement’ with the Andhra Pradesh government in October 2016. The partnership focused on joint innovation projects using technologies like blockchain to focus on digital payments and FinTech-based curriculum developed for education programs in the Indian state.

“From MAS’ perspective, we are looking to create a marketplace in India for Fintech solutions developed in Singapore,” stated MAS FinTech chief Sopnendu Mohanty at the time. “This can potentially help Singapore Fintech startups that are looking to venture into India.”

A year later, the partnership continues to grow with blockchain tech seen as “a natural platform for collaboration” between the Singaporean government authority and the Indian state government.

In underlining the potential of blockchain technology, MAS managing director Ravi Menon stated:

Our banks can work together on new models of cross-border payments to improve settlement time, allow for round the clock operations, and reduce settlement risk.

Blockchain Kills the Central Bank

In his speech, the central banker – without a hint of irony – talked up blockchain’s potential to curb the need for a trusted central party for transactions between entities from different jurisdictions. “DLT (Distributed ledger technology” allows the possibility of various parties working directly with one another to make cross-border transactions cheaper, faster and safer.”

Menon went on to explain the progress made by Project Ubin, a blockchain endeavor by Singapore’s central bank to find solutions in clearing and settlement of payments and securities. In its first phase earlier this year, the central bank issued a digital token of the Singaporean dollar on a private Ethereum blockchain that was used for domestic inter-bank settlements.

Menon added:

Phase 1 of Project Ubin successfully demonstrated that banks are able to transact with one another on an Ethereum-based prototype without going through the MAS.

Details of Phase 2 were revealed earlier this month, pointing to a breakthrough of three new blockchain prototypes for interbank payments and settlements. Singapore’s central bank is also exploring ways in which Project Ubin could work with other central banks’ blockchains for cross-border payments.

In conclusion, Menon added:

This is an opportune time for DLT collaboration, and more broadly FinTech collaboration, between Andhra Pradesh and Singapore.

Featured image from Shutterstock.