The Singapore government has partnered with DBS to create digital Singapore dollars, while India’s central bank has launched a pilot for digital rupees for the wholesale market.
SG Govt, DBS launch digital currency
DBS, in partnership with Open Government Products (OGP), a Singapore government initiative, is creating programmable digital Singapore dollars (DSGD).
The banking behemoth said the Singapore government has given de-facto approval and support for privately issued stablecoins. DBS will be using purpose-bound money-based vouchers (PBM vouchers) with tokenised Singapore dollars to enable transactions with select merchants. These vouchers will remove the need for backend reconciliation while improving productivity, it said.
DBS said this is part of the Monetary Authority of Singapore’s (MAS) Project Orchard, aimed at developing a DSGD. The digital currency will use blockchain technology, including smart contracts, so that small businesses and retail shops are immediately able to settle, pay, and collect money from banks. “The goal is to boost cash flow while saving administrative time,” said DBS, adding that it currently takes 1-2 days for merchants to receive payment credits.
Shee Tse Koon, Singapore Country Head at DBS, said, “Blockchain technology can be the bedrock to build the next generation of payments and settlement infrastructure. The live pilot, launched last week, involves up to 1,000 select consumers and six merchants, including F&B outlets such as Nanyang Old Coffee, Sarnies, Pickleville, The Working Class, and The Three Anchovies.
India’s RBI launches digital rupee for payments
The Reserve Bank of India on Tuesday launched a pilot programme for a digital rupee “for specific use cases”. For starters, the digital rupee or central bank digital currency (CBDC) will be available in the wholesale market, which includes financial institutions such as banks and interbank transaction facilitators such as securities settlement and cross-currency payment entities.
In a month, RBI hopes to extend the use case for e-rupee to the retail category, too, and later to other segments such as cross-border payments. The pilot will see participation from nine banks, including India’s largest lender by assets State Bank of India and private banks such as HDFC Bank and ICICI Bank.
And to start off, the banks will settle secondary market transactions in government securities, said the central bank. “The use of the e-rupee in the wholesale segment is expected to make the inter-bank market more efficient,” said RBI.