The Monetary Authority of Singapore (MAS), the country’s central bank, has announced the development of a blockchain proof-of-concept pilot project that will facilitate inter-bank payments, globally.

Announced today, Singapore’s primary monetary authority revealed the project, developed in partnership with New York-based blockchain startup R3.

The project aims to develop a payment system that will enable banks to transact between global markets at any hour, with instant transfer of funds between participants. Applications will include cross-border payments, trading and settlement processes and the automation of securities issuance through smart contracts.

Underlining blockchain technology’s potential for transformational change in the financial industry, MAS Fintech chief Sopnendu Mohanty stated:

The simplification of processes that comes from having a single and coherent, distributed record of information makes Blockchain technology an attractive solution for the financial sector.

The announcement also revealed the R3 members involved in the pilot, an indicator of the probable scale of the payment system when implemented. Participating R3 members include the Bank of America Merrill Lynch, The Bank of Tokyo-Mitsubishi UFJ, Ltd, Credit Suisse, DBS Bank Ltd, The Hongkong And Shanghai Banking Corporation Limited, JP Morgan, OCBC Bank, Singapore Exchange, United Overseas Bank and BCS Information Systems.

The project’s development comes within days after R3’s planned launch of a blockchain-exclusive lab in the country, also established in collaboration with the Monetary Authority of Singapore. The ‘R3 Asia Lab’ will be the blockchain startup’s primary hub in the continent that focuses on developing distributed ledger solutions and expanding the company’s presence in the continent.

Tim Grant, CEO of R3’s Lab added:

Payments and the representation of fiat currency on Blockchains is a potentially significant use case for distributed ledger technology and we firmly believe that partnership between regulators, central banks and the financial services sector will accelerate solutions to maturity.

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