The Monetary Authority of Singapore (MAS) has released a report detailing potential uses of a purpose-bound digital Singapore dollar (SGD) and the supporting infrastructure required, marking the successful completion of Phase 1 of Project Orchid.A digital SGD can take different forms:
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a retail Central Bank Digital Currency (CBDC), which is the digital equivalent of today’s notes and coins issued by MAS; or
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privately issued money, which could include tokenized bank deposits or securely backed stablecoins.
While MAS has assessed that the case for a retail CBDC in Singapore is not compelling for now, it continues to actively explore good use cases for digital currencies. Phase 1 of Project Orchid explored the concept of purpose-bound digital SGD (purpose-bound money, or PBM, for short).
At the 2022 Singapore FinTech Festival (SFF 2022), DBS Bank (DBS) and GovTech’s Open Government Products Division (OGP) will test the use of PBM for disbursements to selected individuals. Trial participants can use RedeemSG vouchers at participating food and beverage outlets, and merchants will directly receive the underlying digital SGD for the vouchers redeemed.Sopnendu Mohanty, Chief FinTech Officer, MAS, said, “The introduction of e-money provided the ability to store value electronically and carry it with us. Digital currencies go beyond that, allowing money to be programed and used for specific purposes only. Through practical experimentation with the industry, we sharpened our understanding of the potential uses of a digital Singapore dollar and the infrastructure required to support it. We look forward to collaborating further with industry participants and policymakers in subsequent phases of Project Orchid.”
