The Monetary Authority of Singapore (MAS) believes that there is no pressing need for the issuance of a digital Sing dollar even though the country is ready for it, according to Lawrence Wong, Deputy Chairman of MAS and Minister for Finance during a parliamentary meeting.
MAS has been among the central banks at the forefront of experiments with central bank digital currencies (CBDCs), especially wholesale CBDCs, starting over five years ago.
It has been actively engaged in the international discourse on CBDCs among policymakers, industry, and academia.
Several other central banks have taken the same view for now, such as the US Federal Reserve, Bank of Canada, and Reserve Bank of Australia.
MAS said that the issuance of retail CBDCs are not very relevant to Singapore at this juncture as financial inclusion is not a significant problem in the country, which is one of the reasons why CBDCs can seem like a viable option.
The rollout of FAST, PayNow, and SGQR in recent years means that cheap and fast payments are widely available domestically via bank-based payment systems.
MAS has also made move to linkup this infrastructure with Malaysia, Thailand, the Philippines and India which will open up more cross-border electronic payment solutions over time.
The regulator reiterated that it has not completely ruled out introducing a retail CBDC at some stage and will continue to build up its technological and institutional capabilities in the CBDC space.
This is evidenced by MAS’ efforts with Project Orchid to build the technical competencies necessary to issue a digital Singapore dollar.
It also organised a Global CBDC Challenge last year to surface innovative technology solutions focused on CBDCs.
Lawrence Wong
Lawrence Wong, Deputy Chairman of MAS and Minister for Finance said,
“Issuing a retail CBDC will not be a minor decision. There are important risks and uncertainties that come with creating a new form of money. MAS has set these out clearly in a paper that it published on the topic in November 2021. A digital Singapore dollar must be secure and robust once it is implemented.
The banking system needs to be able to adapt to its introduction, and monetary and financial stability cannot be compromised. This is a complex undertaking, and careful practical experimentation alongside industry players will be necessary, if we do decide to proceed with a retail CBDC at some stage.”
