[SINGAPORE] The Monetary Authority of Singapore (MAS) on Thursday (Oct 16) announced a new initiative to extend settlement capabilities offered by financial institutions.
Through the Borderless, Liquid, Open, Online, Multi-currency (BLOOM) initiative, MAS will “collaborate with the financial industry to enable settlement in tokenised bank liabilities and well-regulated stablecoins… through standardised approaches”.
“BLOOM caters to the growing interest among private-sector participants in tokenised bank liabilities and well-regulated stablecoins as settlement assets,” said the authority.
Singapore banks have been accelerating their push into asset tokenisation.
Tokenisation refers to the process of converting a real-world asset, such as a traditional deposit, into a digital representation or “token” on a shared ledger. Such tokens are expected to speed up transactions and enhance the liquidity of assets.
Stablecoins, too, are receiving increased interest. A stablecoin is a form of cryptocurrency designed to maintain a stable value relative to a certain asset, giving it far lower volatility than other cryptocurrencies.
JPMorgan estimates that the stablecoin market, currently valued at US$250 billion, is set to grow two to three times by 2028.
MAS said BLOOM builds upon earlier efforts under Project Orchid, which “explored use cases for a digital Singapore dollar and the infrastructure required to support it”.
More than 10 trials have been conducted as part of Project Orchid since its establishment in 2021. MAS said participating financial institutions have “translated their learnings into market-ready commercial offerings”. These include DBS’ system for issuing digital vouchers with conditions, which uses the blockchain and smart contracts.
Kenneth Gay, chief fintech officer at MAS, said BLOOM takes the work done under Project Orchid further, “enhancing the range of settlement asset options for participants”.
BLOOM encompasses multiple currencies, such as G10 and Asian currencies; domestic and cross-border payment settlement; and wholesale use cases such as corporate treasury management, trade finance and agentic payments.
The initiative’s members include local banks DBS, OCBC and UOB, foreign banks including Standard Chartered and JP Morgan, as well as crypto exchange Coinbase, XSGD issuer StraitsX, and USDC issuer Circle. Singapore investment company Temasek is also a member.
MAS said BLOOM’s initial focus areas will include the distribution and clearing of settlement assets. This is aimed at coordinating disparate networks and enabling the “seamless use, transfer and redemption of different forms of settlement assets”.
Another focus area is the use of programmable controls for standardised mechanisms in compliance checks; the authority said this will enable “more consistency in implementations and lower cost of compliance”.
Finally, BLOOM will explore agentic payments: the use of artificial intelligence agents that execute transactions automatically within pre-defined limits and conditions. The aim of this, MAS said, is to “optimise costs by timing transfers to when conditions are most favourable” and reduce the burden of manual payment management.
MAS said it “looks forward to partner additional financial institutions, industry partners and fellow regulatory bodies to advance BLOOM’s objectives”. It added that entities keen to collaborate or conduct trials may express their interest to do so.
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