This new development, announced by MAS Managing director Ravi Menon marks a departure from the previous simulations. It aims to assess the efficiency and practicality of using CBDCs as instantaneous settlements between commercial banks.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
MAS has only simulated CBDCs in controlled test environments. Menon expressed his contentment with this new initiative, stating, “I am pleased to announce that MAS will pilot the ‘live’ issuance of wholesale CBDCs to instantaneously settle payments across commercial banks.”
Under this program, MAS is working closely with local banks in order to test the use CBDCs as a settlement instrument for domestic payments. Menon clarified the fact that banks participating in this test program would be issuing tokenized liabilities to represent claims on their balance sheet.
The wholesale CBDCs are then transferred to the retail customers. Settlements would be made through an automated transfer.
Menon highlights the…