Cross border payments: Global Digital Currency Progress

cross border payment

In a strategic move to enhance digital asset technology, Singapore’s central bank is poised to join forces with financial regulators from Japan, Switzerland, and the United Kingdom. This alliance is set to embark on joint digital asset pilots, as revealed in a recent press release by the Monetary Authority of Singapore (MAS).


A Unified Venture in Crypto Pilots

Singapore will work alongside Japan’s Financial Services Agency (FSA), the Swiss Financial Market Supervisory Authority (FINMA), and the Financial Conduct Authority (FCA) of the UK. Their combined efforts will concentrate on exploring digital advancements in various sectors, including fixed income, foreign exchange, and asset management.

Project Guardian: A Stepping Stone to Broader Horizons

Building on the foundation laid by Singapore’s Project Guardian in 2022, this initiative expands the scope of asset tokenization. Project Guardian has already witnessed fruitful collaborations with 15 financial institutions, revealing enhanced transactional efficiency through asset tokenization experiments.

As these digital ventures evolve, MAS has recognized the imperative of fostering cross-border regulatory cooperation. To this end, a policymaker group under Project Guardian has been formed, featuring members from FSA, FINMA, and FCA. The group’s mandate is to spearhead policy dialogue, pinpoint emerging risks and regulatory voids, and pursue uniform standards for digital asset networks.

Deputy Managing Director of MAS, Leong Sing Chiong, expressed enthusiasm about this partnership, emphasizing the goal to establish harmonized regulations that support the sustainable growth and international compatibility of the digital asset sector.

Advancing Singapore’s Digital Currency Agenda

Singapore has consistently been at the forefront of digital currency engagement internationally. Notably, in September 2023, MAS concluded a successful cross-border pilot for wholesale central bank digital currencies with support from the Bank for International Settlements, Banque de France, and the Swiss National Bank.

Moreover, Singapore is preparing to introduce regulations ensuring cryptocurrency exchanges adopt trust principles to safeguard consumer assets, with implementation slated for the forthcoming year.

Finally, as part of its regulatory framework refinement, Singapore is considering a prohibition on cryptocurrency lending and staking for retail consumers, an initiative that predates the FTX crisis. This measure, along with a broader set of regulations, underscores MAS’s commitment to consumer protection in the volatile realm of digital currency trading.