The strong trade flows between Singapore and India offer good opportunities for collaboration on fintech and distributed ledger technology (DLT), Ravi Menon, Managing Director, Monetary Authority of Singapore (MAS), said recently.

During his keynote address at the Global Blockchain Business Conference on 9 October 2017 in Andhra Pradesh, India, Menon focused on the “Economic Possibilities of Blockchain Technology.” The Andhra Pradesh government and the MAS signed a FinTech cooperation agreement in October last year.

“This is an opportune time for DLT collaboration, and more broadly FinTech collaboration, between Andhra Pradesh and Singapore. I look forward to seeing FinTechs in Singapore developing solutions for use cases in Andhra Pradesh that will create value and opportunity for the people of this up-and-coming state,” he said.

According to Menon, the key breakthrough of blockchain technology is its ability to establish trust in a decentralised system, allowing diverse parties to collaborate without trusted central entity. He sees great potential in the technology to transform supply chain management systems, financial services, know your customer (KYC) processes, cross-border transactions, and much more. Outlining the potential for blockchain cooperation between India and Singapore, he said:

• “With the strong trade flows between Singapore and India, there are good opportunities for FinTechs and financial institutions in Singapore and Andhra Pradesh to collaborate.
• We can explore how our customs and trade platforms can be linked up to facilitate exchange of trade documents and advance the digitalisation of trade.
• Our banks can work together on new models of cross-border payments to improve settlement time, allow for round the clock operations, and reduce settlement risk.”

Menon said that the MAS is working actively with the financial industry to create a “Smart Financial Centre,” and building a strong DLT ecosystem is part of this broader fintech strategy. The monetary authority is also working on a collaborative initiative to explore the use of distributed ledger technology (DLT) for clearing and settlement of payments and securities, dubbed “Project Ubin”.

The first phase of the blockchain initiative demonstrated that banks are able to transact with one another on an Ethereum-based prototype without going through the MAS. In the second phase, concluded recently, the MAS and the Association of Banks in Singapore (ABS) has developed software prototypes of three different models for decentralised inter-bank payment and settlements with liquidity savings mechanisms.

Menon listed the next steps for Project Ubin, which includes extending the application to cross-border payment and settlement.

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