Key Points:
- The Monetary Authority of Singapore has proposed a common protocol for the use of cryptocurrencies on a distributed ledger.
- The protocol allows for specified conditions when transferring digital money across different systems.
The Monetary Authority of Singapore (MAS) has released a whitepaper proposing a common protocol for the use of cryptocurrencies, such as tokenized bank deposits, stablecoins, and central bank digital currencies (CBDCs), on a distributed ledger.
The protocol allows senders to specify conditions when transferring digital money across different systems, such as validity periods and types of shops. The whitepaper was developed in collaboration with international monetary organizations, financial institutions, and FinTech firms and covers technical specifications for the protocol’s lifecycle and business and operating models.
The whitepaper was supported by the release of software prototypes demonstrating the concept of Purpose Bound Money (PBM), which enables the transfer of digital money under specified conditions across different systems. The PBM protocol is designed to work with different ledger technologies and forms of money and allows users to access digital money using their preferred wallet provider. Financial institutions and FinTech firms are launching trials to test the usage of PBM under different scenarios, including online commerce and programmable rewards.
The PBM whitepaper builds on MAS’ Project Orchid and aims to encourage greater research among central banks, FIs, and FinTechs to understand the design considerations in the use of digital money. PBM source codes and software prototypes developed under Project Orchid were released for public access to support ongoing development and learning. The open-source codes and prototypes demonstrate how PBM can be used to embed digital money in escrow arrangements, serving as a reference model to foster interoperability across different platforms.
MAS’ Chief FinTech Officer, Mr. Sopnendu Mohanty, said that this collaboration has helped achieve advances in settlement efficiency, merchant acquisition, and user experience with the use of digital money. The whitepaper represents an important step toward digital money becoming a key component of the future financial and payment landscape.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Source: https://news.coincu.com/196737-mas-proposes-a-revolutionary-protocol-for/