Singapore tests digital currency system to ease bank payments

A Bitcoin dispensing machine at a shopping mall in Singapore
A Bitcoin dispensing machine at a shopping mall in Singapore

Singapore will launch a new electronic payment system using blockchain, the technology behind the cryptocurrency Bitcoin, the city-state's central bank chief said Wednesday.

The Singapore stock exchange and eight banks will take part in the pilot project, which includes between banks, said Monetary Authority of Singapore (MAS) chief executive Ravi Menon at the Singapore Fintech Festival.

Blockchain technology debuted in 2009 as a public ledger for the bitcoin, but its potential for securely tracking transactions has meant it is being eyed for other uses.

The aims to integrate the service into the mainstream as the Southeast Asian country seeks to become a regional hub for new financial technologies.

During the pilot phase, banks will be able to purchase a regulated by the MAS, which can then be used for an inter-bank payment. The digital currency can then be redeemed for cash.

This removes a need to send instructions through the MAS, a process that adds time and cost to the payment process, Menon said.

He added: "The next phase of the project will involve transactions in , possibly with the support of another central bank."

Blockchains are considered tamper-proof registers in which entries are time-stamped and linked to previous "blocks" in a data chain.

Blockchains serve as public ledgers considered easy to audit and verify. They are also automated, speeding up transactions and limit potential for error or revision.


Explore further

Microsoft teams with Bank of America on 'blockchain'

© 2016 AFP

Citation: Singapore tests digital currency system to ease bank payments (2016, November 16) retrieved 14 October 2019 from https://phys.org/news/2016-11-singapore-digital-currency-ease-bank.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.
8 shares

Feedback to editors

User comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more