MAS proposes protocol to set standard for digital money usage

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The Monetary Authority of Singapore (MAS) has released a whitepaper on purpose-bound money (PBM), a protocol that will set a standard for use of digital money, which includes central bank digital currencies (CBDCs), tokenized bank deposits, and stablecoins.

The PBM protocol allows senders to specify conditions when making transfers in digital money. This includes factors such as how long the money is considered valid and on which platforms it can be used on.

Sopnendu Mohanty, chief fintech officer at MAS, said the initiative will help boost the efficiency of settlements, onboarding of merchants, and user experience when dealing with digital currencies.

The protocol was designed to work with different ledger technologies as well as across use cases such as online shopping and customer rewards. MAS also shared software prototypes and open-source code to show how PBM can be applied in escrow arrangements and other transactions.

The whitepaper was produced in partnership with the International Monetary Fund, Banca d’Italia, and Bank of Korea, as well as industry partners including Grab, Amazon, and Fazz Financial Group.

These partners are also set to trial PBM-based payments and incentives to provide insights into how the tech could benefit consumers, businesses, and agencies.

PBM is part of MAS’ Project Orchid, which aims to develop the technical skills and competencies needed for the authority to issue a retail CBDC, if necessary.

MAS also recently announced that it’s reviewing feedback from respondents on proposed crypto regulatory measures, which it aims to publish by mid-2023.

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