Singapore crowdsources central bank digital currency development

Central Bank Digital Currencies (CBDCs) have become a hot topic for governments around the world, and Singapore has come up with a novel way of planning its own effort: a crowdsourced competition.

The Monetary Authority of Singapore (MAS) yesterday announced the launch of a global challenge to conceptualise a retail CBDC solution.

The challenge invites fintech companies, financial institutions and others to submit solutions for 12 problems centred on CBDC instrumentation, distribution and infrastructure. The problems bring up some interesting points — like how a currency technology can be held accountable while decentralising, create interoperability yet keep standardisation, and incorporate new functionalities while remaining inclusive.

The MAS announcement read:

The organisation then listed a number of public policy objectives the CBDC technology needed to meet, including: be cost effective and retain customer relevancy; be accessible to those across all incomes and tech capabilities; and bolster monetary stability through resilience and integrity.

Fifteen finalists will receive mentorship and APIX Digital Currency Sandbox access. The Sandbox will allow them to test and develop their platforms, giving them access to hundreds of APIs, the Hyperledger global open source developer community, and an AWS platform with promotional credits.

The finalists will then pitch their solutions at Singapore’s November 2021 FinTech Festival, and three will leave SG$50,000 (US$37,000) richer.

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The competition will operate in partnership with a wide variety of global organisations: the International Monetary Fund, World Bank, Asian Development Bank, United Nations Capital Development Fund, United Nations High Commission for Refugees, United Nations Development Program, and the Organisation for Economic Co-operation and Development.

Although there’s no promise that the winning idea will be implemented, the contest will ostensibly provide Singapore with concepts and options for adopting a CBDC of its own.

Many CBDC developments are in response to China’s plan to use its Digital Yuan as a means of extending its global influence by making it an instrument for cross-border transactions. Initial tests have covered Thailand and the UAE, plus Hong Kong.

Japan is also currently studying the feasibility of digital currency and Cambodia launched its own retail CBDC, Bakong, in October 2020. Even the UK is pondering a “Britcoin”.

Parties interested in the competition are encouraged to submit their applications by July 23, 2021, so best get moving. ®