technology

Singapore starts to trial digital Singdollar for payments and vouchers

Singapore starts to trial digital Singdollar for payments and vouchers

The central bank of Singapore has reportedly announced that four trial projects will be carried out this year to test the use of the digital Singapore dollar for making and receiving specific payments by businesses, individuals, and the Government.

The program will be headed by DBS Bank, UOB, OCBC Bank, and Grab along with government agencies, and the financial regulator Monetary Authority of Singapore (MAS).

The trials are based on the concept of purpose-bound money (PBM), a form of digital currency, through which issuers could specify conditions like where it can be used and its validity period, when making transfers to businesses or individuals.

DBS will be testing out using a digital currency for redeeming redeem government-issued vouchers with the Government Technology Agency’s Open Government Products (OGP) branch.

Participants will utilize RedeemSG, a voucher system built by OGP for government agencies to issue vouchers and track their use, at select food and beverage outlets where merchants will instantly receive the equivalent digital Singapore dollar.

OCBC will be testing PBM for fund disbursement from government agencies without participants needing to have a bank account with the Central Provident Fund Board.

UOB will partner with SkillsFuture Singapore for testing PBM to improve the SkillsFuture Credit disbursement process so grants can be released automatically to select training providers as per the eligibility criteria.

Grab will be working with investment firm Temasek and fintech startup Fazz Financial for testing PBM issuance as commercial digital vouchers to participants at the upcoming Singapore FinTech Festival, which can be used for purchases at select merchants.

The projects come after MAS’ decision last year to postpone issuing retail central bank digital currency (CBDC), which is the digital equivalent of the notes and coins currently issued by the central bank.

It marks the completion of Phase 1 of MAS’ Project Orchid aimed at building technical competencies and capabilities needed for issuing a retail CBDC in case there is a need.

A separate report detailing the potential uses of a digital Singapore dollar and the required supporting infrastructure has been issued as well.

Source credit: https://www.straitstimes.com/business/singapore-to-trial-use-of-digital-singdollar-for-government-payouts-and-vouchers

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Pooja Sharma

Pursuing her professional career as a content writer for over two years now, Pooja Sharma is endowed with a post-graduate degree in English Literature. The articles that she writes are a balanced blend of her ever-growing love of language and the technical expertise that she has gained over the years. Currently Pooja pens insightful articles for Newsorigins and numerous other websites, covering subjects such as business, finance, and technology.