As Singapore seeks to comprehend standards in the digital asset space, it has sought insights from different industry players, such as the American global bank JPMorgan.
Through a technical whitepaper dubbed Purpose Bound Money (PBM), the Monetary Authority of Singapore (MAS) has disclosed its collaboration with the International Monetary Fund (IMF), Amazon, JPMorgan, DBS Bank, and Korean and Italian central banks to try and figure out the utility of digital assets.
According to the MAS, smart contracts, well-regulated stablecoins, tokenized bank liabilities, and central bank digital currencies (CBDCs) could act as mediums of exchange in the new crypto era. Nevertheless, their usefulness must be shown above and beyond the current e-payment networks.
The report also noted that digital money seeks to be a game-changer through programmability features, but this is subject to debate and discussion.
As investors and leading banks continue eyeing the crypto sector, the MAS believes a uniform standard should be incorporated in the digital asset sector.
As a result, the financial watchdog suggests the rolling out of the Purpose Bound Money (PBM) concept, which was introduced during Project Orchid. This program intends to make digital money readily available in the future through a robust blueprint and digital infrastructure.
Therefore, the PBM design will not depend on any technology. As a result, it will work across distinctive assets and ledgers.
Per the report:
“A PBM consists of two main components: a wrapper that defines the intended use; and an underlying store of value that serves as collateral. This design allows existing digital money to be deployed for different purposes without altering its native property.”
Meanwhile, as CBDC development continues to gain steam, Ripple’s efforts have not gone unnoticed.
As reported by The Crypto Basic, American Banker highlighted that Ripple was setting the ball rolling through its CBDC platform that would enable financial institutions and governments to enhance the issuance of their own digital currencies and stablecoins.