In August, the Monetary Authority of Singapore (MAS) clarified its views on initial coin offerings (ICOs), and stated that it considers tokens as securities. “MAS has observed that the function of digital tokens has evolved beyond just being a virtual currency. For example, digital tokens may represent ownership or a security interest over an issuer’s assets or property. Such tokens may therefore be considered an offer of shares or units in a collective investment scheme under the [Securities and Futures Act]. Digital tokens may also represent a debt owed by an issuer and be considered a debenture under the SFA.”
The Monetary Authority of Singapore (MAS) has now unveiled the second phase of “Project Ubin”, whose purpose is to test how a tokenized version of the Singaporean dollar could be created. Project Ubin has grown to include prototype tools from various parts of the interbank settlement process.
The MAS stated “The three software models developed are amongst the first in the world to implement decentralized netting of payments in a manner that preserves transactional privacy. Existing netting programmes used in inter-bank payments rely on a single payment queue visible to the operator to find offsetting payments. Decentralizing the queue, however, potentially exposes payment details to an unauthorized party. The latest models in Project Ubin achieve a superior combination of decentralization and privacy.”
Sopnendu Mohanty, the MAS chief fintech officer, added “We are sharing our learnings and knowledge from Project Ubin to encourage greater experimentation amongst central banks and financial institutions. We look forward to working with other central banks on the use of DLT for cross-border applications”.