Singapore MAS And The New York Fed Are Working Together to Examine CBDCs
Collaborations between the Monetary Authority of Singapore (MAS) and the Federal Reserve Bank of New York’s New York Innovation Center (NYIC) will take effect. The partnership aims to conduct an experiment employing central bank wholesale digital currency (wCBDCs). Regulators are curious about wCBDC’s capability to process international wholesale payments.
The Introduction of Project Cedar Phase II X Ubin+
The Malaysian Government Announcement Service announced the ubin+ launch on November 11. The wCBDCs will serve the NYIC and MAS as a settlement asset in their developed framework. Transactions involving several different currencies and countries will be subject to this.
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This study focuses on examining how well wCBDC can mitigate settlement risk. Leong Sing Chiong serves as the MAS’s Deputy Managing Director. The experiment’s central idea, “interoperability,” was emphasized by him.
Chiong claims that the project has a practical approach and plans to make wholesale CBDC compatible with other networks in the future. This will happen, he said, while yet maintaining each network’s autonomy. Project Cedar Phase II x Ubin+ won’t promote any specific policy result, claims the statement. Additionally, it doesn’t indicate that the Federal Reserve will decide soon on issuing a CBDC.
Furthermore, the statement does not suggest a quick decision regarding issuing a CBDC. In 2023, researchers plan to produce a report summarizing the study’s results. On November 4, NYIC reported on the first stage of Project Cedar being accessible. Initially, several ledgers served to keep track of spot currency exchange operations.
Then, these transactions on a blockchain network with permissions generated the unspent transaction data.
Project Hamilton
Project Hamilton, a retail CBDC developed by the Boston Federal Reserve (Fed), is being carried out in conjunction with the Massachusetts Institute of Technology’s Digital Currency Initiative (MIT).The Malaysian Monetary Authority is the organization in charge of Ubin+, a global effort. It attempts to decrease risks and increase cross-border FX settlement efficiency.
This goal is essential for better interoperability and worldwide connectivity for wholesale digital currencies. Michelle Neal is the New York Federal Reserve’s Executive Vice President and Head of markets. Neal said that the Fed does not intend to issue a CBDC at a presentation in Singapore.
However, he added that the Federal Reserve has looked at foreign currency spot settlement from that institution’s standpoint.
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