Monetary Authority of Singapore (MAS), along with other government authorities and industry players, is set to commence a series of trials to examine the concept of purpose-bound digital Singapore dollar (SGD) to support government payouts and vouchers.
The trials have been unveiled by MAS in a new report that outlines the potential uses of a purpose-bound money (PBM).
This report marks the end of the first phase of Project Orchid, which was initiated by MAS in November last year to test a number of designs and technical features of a retail CBDC for Singapore.
The proposed trials include the use of PBM to make payments to certain individuals.
DBS Bank and GovTech’s Open Government Products Division (OGP) will conduct this trial at the 2022 Singapore FinTech Festival (SFF 2022), to be held from 2-4 November this year.
Participants of the trial will be able to use RedeemSG vouchers, developed by GovTech’s OGP, at the participating food and beverage stalls. Merchants will directly receive payment in digital SGD against the redeemed vouchers.
For the trial that involves commercial vouchers, Temasek, Fazz Financial Group and Grab will examine the allocation of PBM as commercial digital vouchers to the members of SFF 2022.
One of the trials will check the use of PBM to disburse funds from government agencies to various recipients including the ones who do not have bank accounts.
OCBC and Central Provident Fund Board (CPFB) will carry out this trial, stated MAS.
In addition, United Overseas Bank (UOB) and SkillsFuture Singapore (SSG) will study the use of PBM to improve the existing SSG Credit disbursement system.
MAS chief fintech officer Sopnendu Mohanty said: “The introduction of e-money provided the ability to store value electronically and carry it with us.
“Digital currencies go beyond that, allowing money to be programmed and used for specific purposes only.
“Through practical experimentation with the industry, we sharpened our understanding of the potential uses of a digital Singapore dollar and the infrastructure required to support it.”