The Monetary Authority of Singapore (MAS) announced that it has successfully completed a proof-of-concept (PoC) project using blockchain technology in order to carry out domestic inter-bank payments.

The financial regulatory authority carried out the project in partnership with R3 blockchain consortium that was first announced in last November. The announcement immediately follows MAS’s collaboration with Abu Dhabi Global Market in a move to foster the fintech innovation and cross-border activities.

The distributed ledger technology (DLT) PoC achieved the objectives of creating and building a digital representation of the Singapore dollar for interbank settlement, testing methods of connecting bank systems to a DLT, and making the MAS Electronic Payment System (MEPS+) interoperate with the DLT for automated collateral management, the release stated.

“This wholesale payments project has demonstrated the commitment of MAS and the industry to co-create concrete use-cases for technologies such as DLT,” Sopnendu Mohanty, Chief FinTech Officer at MAS, stated. “Already, some institutions have embarked on projects that are inspired by this collaboration. We look forward to the next phases of our project which will develop trial applications for securities settlement and cross-border payments.”

The MAS also has ideas for two spin-off projects that will leverage the lessons of the inter-bank payments project. The first project is driven by Singapore Exchange (SGX) and aims at creating fixed income securities trading and settlement cycles in a more effective manner, using DLT. The second is focused on new ways to perform cross-border payments with the help of central bank digital currency.

MAS is discussing on developing links from Singapore to other countries using DLT to allow cross-border payments to settle directly using central bank accounts.

“We have always believed that true progress in advancing the implementation of distributed ledger technology in financial services would be achieved by bringing central banks, commercial banks, and technology partners together in an open setting. This effort has confirmed that harnessing the power of collaborative networks can yield demonstrable results and we hope that the progressive stance of all the participants in this project, and especially that of MAS, will inspire similar work in other jurisdictions going forward,” Tim Grant, CEO of R3’s Lab and Research Center, who is also a member of MAS’ International Technology Advisory Panel, said.