The Monetary Authority of Singapore (MAS) has collaborated with major tech companies such as Amazon, DBS, and Grab to release a whitepaper proposing a common protocol for the use of various types of digital currencies.
The protocol will enable senders to specify conditions for digital currency transactions, including validity periods and types of shops. The new concept, called Purpose Bound Money (PBM), aims to enhance settlement efficiency, merchant acquisition, and user experience with digital money.
Encouraging Research and Collaboration
The whitepaper covers technical specifications outlining the lifecycle of PBM and encourages central banks, financial institutions, and fintech firms to conduct more research into digital money use cases. The paper also highlights that this collaboration between industry players and policymakers has helped advance the role of digital currencies in the future financial landscape.
Industry Players and Policymakers Working Together
The MAS worked with international financial institutions such as the International Monetary Fund, Banca d’Italia, and Bank of Korea to develop the whitepaper. Amazon, DBS, and Grab are among the fintech firms planning to pilot PBM, with Amazon specifically trialing escrow-like arrangements for online retail payments.
Singapore Embraces Crypto-related Businesses and Activities
This move comes as Singapore continues to embrace crypto-related businesses and activities, granting licenses to stablecoin provider Circle and digital payment token service provider Crypto.com.
Overall, the proposal for digital money standards with the involvement of major industry players represents a step towards greater adoption and regulation of digital assets in Singapore.