MAS and ABS release source-code of successful blockchain prototypes for inter-bank payments from Project Ubin

The industry consortium led by the Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) has released a report on Phase 2 of Project Ubin and source-codes on distributed ledger prototypes for inter-bank payments developed under the Project.  

The report: ‘Re-imagining Interbank Real-Time Gross Settlement Systems Using Distributed Ledger Technologydescribes the prototypes developed on three Distributed Ledger Technology (DLT) platforms (Corda, Hyperledger Fabric and Quorum) and shares the findings and observations from the project.

Project Ubin was revealed at last year’s Singapore FinTech Festival in November and the completion of Phase 1 was announced in March 2017. Phase 1 achieved the objectives of producing a digital representation of the Singapore Dollar (‘SGD-on-ledger’) for interbank settlement, testing methods of connecting bank systems to a DLT, and making the MAS Electronic Payment System (MEPS+) interoperate with DLT for automated collateral management.

Phase 2 of Project Ubin was conducted together with 11 financial institutions [1] and five technology companies. Its completion was announced on October 5, 2017 in a joint release by MAS and ABS.

In this second phase, three software models were developed, which are amongst the first in the world to implement decentralised netting (aggregating and offsetting the value of multiple positions or payments due to be exchanged between two or more parties) of payments in a manner that preserves transactional privacy.

The source-codes and technical documentation of the three successful DLT based prototypes developed in Project Ubin Phase 2 have also been released for public access under Apache License Version 2.0.

Central banks, financial institutions, as well as academic and research institutions can now tap on the open source-codes to facilitate their experiments, research and innovation. Academics can use the available resources to perform additional research on areas relating to DLT (e.g. scalability, performance, LSM algorithm optimisation). Financial Institutions can reference the privacy-preservation models for internal projects.

In addition, the resources enable central banks to reuse the prototypes to conduct internal trials on domestic inter-bank payments.

MAS will further leverage the collective knowledge of the open-source community though the Linux Foundation and the Hyperledger Project and encourage both institutions and individuals to contribute and improve on the prototypes.

Sopnendu Mohanty, Chief FinTech Officer, MAS, said, “Open-sourcing these prototypes will encourage other central banks to conduct similar trials and engender further development on domestic inter-bank payments. We aim to link up such DLT-based systems in the future for improved cross-border connectivity. This is our contribution to the global financial ecosystem, and a step towards developing cheaper, safer and more efficient cross-border payments.”

“Project Ubin has brought the banks together in experimenting with DLT in a collaborative, and multidisciplinary manner. We see immense benefits from such industry partnership that creates a vibrant ecosystem. We are also encouraged that the fruits of our project can be shared with other central banks and players in the financial industry to catalyse more innovations,” added Ong-Ang Ai Boon, Director of ABS.

In his remarks, ‘Singapore FinTech Journey 2.0’, at the Singapore FinTech Festival, Mr. Ravi Menon, Managing Director of MAS, said, “Please take a look at the prototypes, study them, build upon them.”

He also revealed that Singapore is planning to extend Project Ubin beyond Singapore and announced a collaboration on cross-border payments with the Bank of Canada using blockchain technology.

[1] The participating financial institutions are Bank of America Merrill Lynch, Citi, Credit Suisse, DBS Bank Ltd, HSBC Limited, J.P. Morgan, Mitsubishi UFJ Financial Group, OCBC Bank, Singapore Exchange, Standard Chartered Bank, and United Overseas Bank. Accenture was appointed to manage and develop the prototypes. R3, IBM, and ConsenSys were engaged to provide support on the respective DLT platforms of Corda, Hyperledger Fabric and Quorum. Microsoft was engaged to support the deployment of the prototypes on Azure Blockchain.  

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