The Monetary Authority of Singapore (MAS) is the latest government institution to pursue an initiative targeting Central Bank Digital Currencies (CBDCs).
Singapore’s central bank recently launched what it described as a “global challenge” for a retail CBDC solution. The initiative, dubbed “Global CBDC Challenge,” focuses on enhancing the effectiveness of payment and stimulating financial inclusion through the discovery of innovative retail ideas driven by the CBDC solution.
The MAS initiative has the backing of several financial institutions including the International Monetary Fund, World Bank, Asian Development Bank, United Nations capital Development fund, UN High Commission for Refugees, UN Development Programme, and the Organisation for Economic Cooperation and Development. Tech firms including Amazon Web Services, Mastercard, Partier, R3, and the Mojaloop Foundation are also endorsing the initiative.
“Central Banks worldwide are actively exploring issuance of digital currencies, and are confronted with a wide range of policy and technology challenges. Through the Global CBDC Challenge, MAS hopes to encourage innovator communities worldwide to develop and showcase solutions that can maximize the potential of CBDC to deliver efficiencies to payment services, improve financial inclusion, consistent with central banks’ core mandate of monetary stability,” MAS Chief FinTech Officer Sopnendu Mohanty said.
The challenges at hand
As part of the challenge, various financial startups and companies have been invited to deliver substantial ideas capable of fine-tuning solutions to 12 problem statements hanging on three delicate areas: CBDC instrument, CBDC distribution, and CBDC infrastructure.
The 12 problem statements include anonymity and privacy, a timely hot topic given the ongoing concerns on how effective the CBDC can make for the protection of personal and consumer transaction data while allowing monitoring of potentially illicit transactions.
Another problem statement concerns facilitating interoperability without commonly accepted standards.
Up to three winners will be selected, with each receiving S$50,000 ($37,000). Interested applicants have until July 23, 2021, to submit their applications
