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 Technology ’ describes 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  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
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
“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.
 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.