MAS calls for standards for digital currencies

At collaboration with the IMF and others central banksthe Monetary Authority of Singapore (MAS) proposes a protocol for the use of digital currencies. From companies as Amazon participate in experiments.

How can we make financial transactionsHow can we ensure that the world’s financial transactions are carried out through multiple digital currencies and digital assets, such as CBDCs or stablecoins? Thanks to various standards and theinteroperability between technologies.

Singapore’s central bank and several of its counterparts and financial institutions are starting to think about these future solutions. In collaboration with private e-commerce players, including Amazonthey published a white paper.

A common protocol to bring currencies closer together

In the emerging digital ecosystem, the currency itself is becoming programmable. However, for central bankers, this feature must not be at the expense of money’s ability to serve as a medium of exchange.

To this end, the Monetary Authority of Singapore and its Italian and Korean counterparts, as well as the IMF, are looking into the concept of “Purpose Bound Money” (PBM). Money can be assigned a purpose without having to be programmed.

PBM is characterized by the use of a common protocol designed to work with different register technologies and forms of money. Thanks to a standardized format, users will be able to access digital money using the wallet provider of their choice,” the report details.

Amazon pilots online payments

For its authors, the use of a common protocol offers a number of advantages. Firstly, the same infrastructure can serve several use cases. In addition, users of heterogeneous wallets are able to exchange digital assets without prior customization.

From pilots PBM pilot tests are currently underway between financial institutions and private players. These tests focus on e-commerce and programmable rewards. Amazon, FAZZ and Grab are partners in the first pilot.

They are collaborating on a use case around escrow agreements for online retail payments.

This allows the merchant to be paid only when the customer receives the purchased items, giving greater assurance to both parties,” says the white paper.

Combining consumer experience and vendor friction

Regarding Programmable rewards, pilot participants will test the use of PBM for cashback and other financial incentives. The aim is to improve the consumer experience while reducing friction for merchants.

For MAS’s fintech director, these initiatives enable “achieve significant advances in settlement efficiency, merchant acquiring and user experience through the use of digital money. “.

According to Sopnendu Mohantyelle, the work carried out reinforces above all “ the prospects of digital money becoming a key element of the future financial and payments landscape “.

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