As more governments assess the benefits of digital currency (CBDCs), they are being employed in the financial industry as a substitute for conventional digital products. For instance, since 2014, the Chinese yuan has been subject to proof of concept testing with favorable results. The decrease in digital transactions and the increased demand for more digital products have forced banks to explore new banking standards, including the implementation of CBDC, to continue being competitive.
In Singapore, CBDCs are being tested
The Singapore Monetary Administration, which is a leader in digitalization, has provided an incentive for CBDC development through 15 companies to display the R-CBDC design evidence at this month’s Singapore Fintech Festival. From 8-12 November 2021, three of the 15 candidates will be selected by the Massachusetts Academy of Science. Every winner receives SGD 50,000 (about $37,193).
A selection of 15 finalists for the Global CBDC Challenge, which comprises stakeholders from the fintech, technology, and financial services industries was revealed by the Malaysian Association of Securities.
MAS’ Chief Financial Technology Officer Mr. Sopnendu Mohanty, noted,
According to the Global CBDC Challenge, the goal is to find and develop retail CBDC solutions that benefit the world. During an 8-week acceleration phase, Finalists will work with Tribe Accelerator to further refine their concepts as part of the development of a CBDC complete retail payment system. Product enhancement phase: the APIX digital sandbox enables finalists to quickly prototype digital currency solutions during the product enhancement phase.
Participation in the Blockchain network
The finalists are composed of companies from seven nations, including the United States and Singapore, who are six out of fifteen participants, according to the MAS announcement. The
Crypto Twitter, on the other hand, was keen to draw attention to the fact that it has ties among other participants with famous blockchain projects. Examples are Crypto Poet’s suggestion of Mojaloop, a Ripple partner, however, their name has not been picked as a suitable choice. On the other side, MAS opted to engage in the accelerated program of the Bitt and Stelar Development Foundation.
On the contrary,
Singapore’s image as a cryptocurrency-friendly court is fading.
Projects from other nations contributing to the growth of Singapore’s CBDC system will have a detrimental impact on the public perception of the country.
A Former Crypto Capital
Singapore’s digitization objective has repercussions for good growth in the global crypto sector. As a rapidly digitalizing country, Singapore has a long list of crypto-exchanges for market access, such as Géminis, which suggests that capital in the country might boost the flow and amount of crypto-cash through increased market access.
According to a survey, 67% of Singaporeans possess cryptocurrency; Ethereum accounts for 78% of total ownership. On the other side, Singapore represented the views of most Asian nations when it comes to laws in cryptocurrencies. Due to suspected breaches of the Payments Services Act, the Singapore Monetary Authority has notified Binance of the request to discontinue the provision of regulated service in the country.
While Singapore aims to be a worldwide leader in the digital economy, the creation of the CBDC needs the government to balance centralized and decentralized efforts. However, according to Insider, the crypto-friendly reputation of Singapore has drawn crypto-monetary firms since its crackdown in June; however, the attitude of Singapore may soon change.
While governments consider CBDCs a feasible digital transaction option, they also pose a hazard that does not exist in traditional fiat currencies like the US dollar. Anonymity is no longer an option without addressing the more long-term digital consequences of CBDCs, and CBDCs can soon become dystopian.