DLT-based cross border trade finance infrastructure to be first collaboration under Singapore-Hong Kong FinTech cooperation agreement
The Monetary Authority of Singapore (MAS) and the Hong Kong Monetary Authority (HKMA) signed an agreement to strengthen co-operation on FinTech between the two cities and foster FinTech development within the region. The Co-operation Agreement was exchanged on 25 October 2017, at the FinTech Day organised by the HKMA.
As part of the Agreement, MAS and HKMA have committed to work on a strategic project on trade finance cross-border infrastructure, based on distributed ledger technology (DLT or blockchain), as their first collaborative initiative. It will involve Singapore’s National Trade Platform. More details will be announced by the two authorities next month. Mr. Ravi Menon, Managing Director of MAS, spoke about this in a keynote address earlier this month. (Earlier this year, HKMA developed a proof-of-concept for DLT-based platform for trade finance in collaboration with Deloitte and a consortium of banks.)
Besides joint innovation projects, the two monetary authorities will collaborate on other FinTech initiatives, facilitate referrals of innovative businesses, share information, and exchange expertise, to facilitate financial innovation in Singapore and Hong Kong, in line with other bilateral FinTech cooperation agreements.
Mr. Norman Chan, Chief Executive of the HKMA, said, “Hong Kong and Singapore are the two leading international financial centres in the region and are actively deploying FinTech. Collaboration between the HKMA and MAS will create significant synergy for the development of fintech and more efficient fund flows between the two markets.”
Mr. Menon commented, “MAS is delighted to embark on this FinTech partnership with Hong Kong. This is one of our more significant FinTech co-operation agreements, given the extensive financial and trade linkages between Singapore and Hong Kong. We are especially pleased that we have a live project to enhance the trade finance corridor between the two financial centres.”
Since last year, MAS has signed several agreements with overseas financial regulators for cooperation on the development of FinTech, including with the Financial Conduct Authority, UK (May 2016), Australian Securities and Investments Commission (June 2016), Swiss Financial Market Supervisory Authority (September 2016), Korean Financial Services Commission (October 2016), Autorité de Contrôle Prudentiel et de Résolution and the Autorité des Marchés Financiers of France(March 2017), Financial Services of Agency, Japan (March 2017), the Danish Financial Supervisory Authority (June 2017), Bank of Thailand (July 2017) and the Securities Commission, Malaysia .
In late March, MAS entered into a Cooperation Agreement with Abu Dhabi Global Market to cooperate on developments and initiatives that nurture FinTech entrepreneurship and support innovation in financial services in both countries.
On May 23 2017, MAS signed a memorandum of cooperation with International Finance Corporation (IFC), a member of the World Bank Group to work together for establishing and developing the ASEAN Financial Innovation Network (AFIN). In June 2017, MAS and the Association of Supervisors of Banks of the Americas (ASBA) signed a MOU to bolster FinTech ties between Singapore and the Americas.