The Monetary Authority of Singapore (MAS) and the Bank of Canada have set the trend becoming the first central banks to use DLT for a digital cross border payment.
MAS linked up with its Canadian counterpart Project Jasper via its own pilot payment network Project UBin in a cooperative attempt to lower the cost of cross-border payments via blockchain, and also speeding up the process of transmission and reception.
Sopnendu Mohanty, MAS chief fintech officer, said that the two projects were following on from an ongoing collaboration between the two country’s central banks and commented: “Together, these projects have addressed many technical questions and brought the technology to a higher level of maturity.”
Scott Hendry, the Bank of Canada’s senior special director of financial technology said that forward planning for more cooperation between the banks was an essential ingredient for future success in lowering costs and enhancing efficiency in cross border payments.
“Only through continued collaboration and fundamental research will it be possible for this technology to mature and for policymakers to fully understand its potential.”
A senior financial specialist at the World Bank has released a paper which agrees that distributed ledger technology could help bring down remittance costs and improve cross-border payments compliance. The World bank blog also states the “industry is ripe for disruption“, citing DLT as being well positioned to make its mark.
One major area of concern expressed by the World Bank which was seen as a hurdle to the take up of DLT in this sector was a general distrust of such solutions due to industry concerns and misunderstanding regarding the nature of cryptocurrency, borne from the same technology.
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