The project could result in offering a payment system for the partners to carry out transactions in different global markets round-the-clock.
Currently, the transactions are restricted by time zone differences and office hours.
The consortium includes Bank of America Merrill Lynch, The Bank of Tokyo-Mitsubishi UFJ, Credit Suisse, DBS Bank, and The Hongkong and Shanghai Banking Corporation,
It also includes JP Morgan, OCBC Bank, Singapore Exchange, United Overseas Bank and BCS Information Systems as a technology provider to the project.
The project involves the development of a pilot system to issue and transfer funds among participants, by using blockchain infrastructure.
By decentralizing and distributing the software that records and validates payments, the system is expected to be more resilient against stoppages.
MAS Chief FinTech Officer Sopnendu Mohanty said: “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.
“MAS is engaging with the industry and working closely with our partners to explore innovative payment solutions.”
The project results are expected to offer guidance on future blockchain-based projects on cross border payments, automation of securities issuance, trading and settlement.
R3’s Lab and Research Center CEO and the MAS International Technology Advisory Panel member Tim Grant said: “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.”
In June, Canadian central bank said that it was experimenting a blockchain-based payment transfer system in partnership with R3 CEV, a consortium of major global banks, and the Canadian Payments Association.
Image: The MAS Building at 10 Shenton Way, Singapore. Photo courtesy of Nicolas Lannuzel/Wikimedia Commons.
