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  • K Kim and S Pettigrove

Singapore proposes common standards for digital money

Updated: May 2

On 20 June 2023, the Monetary Authority of Singapore (MAS) published a whitepaper proposing common conditions and standards for the use of digital money including stablecoins, central bank digital currencies (CBDCs) and tokenised bank deposits. The paper is a joint effort with the International Monetary Fund, Banca d’Italia, Bank of Korea, and a number of financial institutions and FinTech companies. The paper was released alongside the launch of software prototypes for so-called Purpose Bound Money (PBM), designed to allow senders to:

specify conditions, such as validity period and types of shops, when making transfers in digital money across different systems.

The Paper proposes PBM as a common standard for interacting with different distributed ledger technology and forms of money. It covers technical specifications as well as business and operating models to provide an understanding of how the PBM lifecycle works from issuance to redemption and how transactions can be planned through the protocol.


The paper notes that the standards will enable service providers to select the supporting ledger type that ‘best suits their business model and intended use cases’. It will also provide flexibility to users, by granting them access to digital money with their chosen wallet provider. The MAS reported:

With a common protocol, the same infrastructure can be used across multiple use cases. Stakeholders using different wallet providers can transfer digital assets to one another without the need for customisation.

Financial institutions and FinTech firms (including the likes of Amazon and Grab) have already began trialing PBM for different use cases including ecommerce deliveries (e.g. payment escrow) and programmable rewards. The Paper also suggests other potential applications including pre-paid packages, contractual agreements, commercial lease, trade finance, donations and cross-border payments. Although it is currently at a trial stage, once implemented, PBMs are intended to enhance transparency and accountability of transactions by ensuring payments are made only when requisite conditions are satisfied.


Furthering its efforts to unlock the benefits of blockchain technology, the MAS announced on 26 June that it will also expand the industry pilots under the Project Guardian initiative adding more asset classes. In particular, 'asset and wealth management, fixed income and foreign exchange' were named as the three new areas. A new Project Guardian Industry Group was established to lead the proposed pilots, with over 11 participating financial institutions. In the asset and wealth management sector, the planned pilots vary from digital structured products to tokenised investment products. Under fixed income and foreign exchange, pilots concern tokenised bonds, bank liabilities and asset-backed securities. The Japan Financial Services Agency has joined the initiative, making it the first foreign regulator to participate in the project.


This announcement follows MAS' first industry pilot in November 2022 under Project Guardian, which was launched with intent to explore the economic potential and value of public blockchains to facilitate digital asset trading and tokenisation.


The PBM concept and extension of Project Guardian are indicative of Singapore's ambition to continue to be a leader in payments and financial markets innovation by establishing common standards and piloting the use of blockchain technologies.

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