Singapore has always been advanced in adopting substantial policymaking in the fintech ecosystem. From the adoption of blockchain in governance to regulating cryptocurrencies, Singapore has provided itself to be a competitive market for disruptive technologies and fintech. Recently, the Monetary Authority of Singapore (‘MAS’), on July 13, 2020, announced that its blockchain-based currency payment network, named Project Ubin, has completed Phase 5 testing and is ready to go live soon. MAS also issued a technical report with their partner Temasek (a private limited investment holdings company based in Singapore. Moreover, Accenture and J.P. Morgan have also contributed towards the research and development of Project Ubin. MAS states that Project Ubin shall be extremely beneficial for the financial industry.

We have analysed the 11 Key elements of Project Ubin:

  1. Project Ubin is a Decentralised Ledger Technology (‘DLT’) based international settlement network. On Phase 5 of testing, Project Ubin successfully completed the settlement of payment of different international currencies on the same network. This would enhance the conventional payments channel to enable ease of settlement process in less time.
  2. Project Ubin can settle and validate assets on private exchanges, conditional payments and escrows, and payments which has been committed for trade finance as well.
  3. Project Ubin uses a smart contract mechanism for validating payments across cross border. Project Ubin’s commercial application would include payments in multiple currencies, foreign currency exchange, settlement of foreign currency-denominated securities.
  4. One of the most interesting things is that Project Ubin can also enable itself with other blockchain-based platforms to enhance digitisation and explore various other use cases. This ensures the scope of interoperability, a much-discussed topic amongst blockchain fanatics.
  5. MAS also hopes to issue central bank digital tokens and Project Ubin would ease the process for the same. Moreover, the Government and Central Bank authorities have also been working on conducting inter-bank payments with the SGD using blockchain. Phase 1 of which was completed using R3’s blockchain network.
  6. MAS has also issued a report for collaborating Project Ubin with Real-Time Gross Payments (‘RTGS’), for which the technical documentation has been made public on November 14, 2017.
  7. Most importantly, Project Ubin shall also facilitate the settlement of tokenised assets across different blockchain platforms. The same would be done through the development of Delivery versus Payment (‘DvP’) capabilities. This will surely drive investor sentiment towards Singapore markets for tokenised digital currencies and securities assets investment. DvP initial successful completion has been conducted on November 11, 2018.
  8. The Project Ubin shall also facilitate cross border interbank payments settlement, which shall ensure security and traceability of payments made across the globe. For this purpose, the MAS had also published a technical paper for analysing current challenges and technical overview of the settlements system. For this purpose, the Bank of Canada (‘BOC’) had collaborated with MAS to produce the technical overview.
  9. During the Phase 5 testing of Project Ubin, it was ascertained that Project Ubin is able to collaborate with other blockchain networks to ensure cost efficiencies with a faster settlement mechanism. The DvP system will be enabled with various private exchanges as well.
  10. Project Ubin shall also ensure a better supply chain for accounting and reconciling of purchase, receipt, approval, and payments for goods and services.
  11. Since Project Ubin appears to be interoperable, MAS has also explored various other use cases such as the healthcare and insurance industry. Project Ubin shall also enable for filing and receiving of claims procedures for insurers. It would appear that Project Ubin is scoped to be beyond just creating a future of payments. Rather, MAS has evolved in grasping formulating other use cases such as the media and entertainment industry and the automobile industry as well.

Various multi-nationals have been involved in the development of Project Ubin. The Phase 5 completion paper terms the project as a “garage project” which has innovated through subsequent collaboration. With the introduction of Project Ubin, Singapore shall become a sure site for investors, especially in the FinTech markets. With the advancement of tokenised assets, Project Ubin shall enable the assurance of transparency in governance. MAS has not currently given an exact date for the project to go live, however, it is believed that with the completion of all major protocols and the final phase, Project Ubin shall be introduced in real-time markets soon.

Leave a comment