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On Friday, The Monetary Authority of Singapore (MAS) introduced a groundbreaking pilot program to launch the live issuance of a wholesale Central Bank Digital Currency (CBDC) denominated in Singaporean dollars.
This significant development, disclosed by MAS Managing Director Ravi Menon, marks a departure from previous simulations and aims to evaluate the practicality and efficiency of employing CBDCs for instantaneous settlements among commercial banks.


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Until now, MAS had only simulated the issuance of CBDCs within controlled test environments. Menon expressed his contentment with this new initiative, stating, “I am pleased to announce that MAS will pilot the ‘live’ issuance of wholesale CBDCs to instantaneously settle payments across commercial banks.”

Under this test program, MAS will collaborate closely with local banks to investigate the use of CBDCs as a settlement asset for domestic payments. Menon clarified that participating banks would issue tokenized liabilities representing claims on their balance sheets.

Retail customers could then use these tokenized liabilities for transactions with merchants, and settlements would be executed through an automatic transfer of wholesale CBDCs.

Menon highlighted the efficiency of this process, emphasizing that “Clearing and settlement thus occur in a single step, on the same infrastructure, unlike the current system in which clearing and settlement take place on different systems, and settlement occurs with a lag.”

Wholesale CBDCs are primarily employed by central and commercial banks and other significant financial institutions for settling payments. Ravi Menon identified four contenders in the realm of digital money: privately issued cryptocurrencies, CBDCs, tokenized bank liabilities, and well-regulated stablecoins.

Regarding cryptocurrencies, Menon expressed reservations, stating that they have not performed well as a medium of exchange or store of value. He noted their price volatility and the significant losses suffered by many cryptocurrency investors due to speculative swings.

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