The Monetary Authority of Singapore partners with the Federal Reserve Bank of New York’s New Innovations Center (NYIC) to jointly experiment and explore how wholesale Central Digital Currencies (wCBDCs) could enhance the efficiency of wholesale cross-border payments, which involve multiple currencies. 

The name of the project is Project Cedar Phase II x Ubin+. The project aims to enhance designs for atomic settlement of cross-border cross-currency transactions, leveraging wCBDCs as a settlement asset. 

To reduce the settlement risk, which is already a key pain point of cross-border cross-currency transactions, the project aims to establish connectivity across multiple heterogeneous simulated currency ledgers.

Head of the Markets Group at the New York Fed, Michelle Neal said, “Experimentation across the central banking community is vital to leverage the full potential of digital assets and CBDCs in particular. “Building off Phase I, the Project Cedar Phase II x Ubin+ collaboration will provide further visibility into the functionality and interoperability of multi-currency ledger networks utilizing their own unique designs.”

Leong Sing Chiong, Deputy Managing Director (Markets & Development), MAS, said “Project Cedar Phase II x Ubin+ advances global efforts to evaluate the benefits of wholesale CBDCs and help build capabilities for a future financial infrastructure that is open and interoperable. The project takes a practical approach and designs for any future wholesale CBDC to be interoperable across networks while maintaining each network’s autonomy.”

Cedar Phase II x Ubin+ experiment, the project doesn’t entail improving any policy outcome. It doesn’t even suggest the Federal Reserve make “any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, nor how one would necessarily be designed.”

In the Federal Reserve context, Project Cedar is a multi-phase research effort to develop a technical framework for a theoretical wCBDC and aims to contribute to a broad and transparent public dialogue about CBDC from a technical perspective. According to a report, “Phase I of Project Cedar found that using a wCBDC prototype to facilitate transactions supported by blockchain technology could improve the speed and safety of cross-border wholesale payments.”

In the meantime, the recently launched Ubin+ is a collaborative effort by MAS with other international partners to reduce the risks involved in cross-border payments  and improve efficiency by advancing cross-border connectivity and interoperability of wholesale digital currencies.

with international partners to improve the efficiency and reduce the risks of cross-border foreign exchange settlement, by advancing cross-border connectivity and interoperability of wholesale digital currencies.

Sopnendu Mohanty, Chief Fintech Officer, MAS said, “Interoperable wholesale digital currencies offer efficiency gains through a growing range of cross-border use cases. We will evaluate these new use cases simultaneously, to keep pace with technological advancements, focusing on use cases that create good value for the broadest range of stakeholders. Working with competent, like-minded partners will accelerate central banks’ collective progress to an optimal future state of digital infrastructures.”

 A detailed report will be released in 2023, explaining the experiment and its findings.

Menwhile, the recently launched Ubin+ is MAS’ collaborative initiative with international partners to improve the efficiency and reduce the risks of cross-border foreign exchange settlement, by advancing cross-border connectivity and interoperability of wholesale digital currencies.

A report detailing the experiment and findings of Project Cedar Phase II x Ubin+ will be released in 2023.

Michelle Neal

Michelle Neal, Head of the Markets Group at the New York Fed said,

“Experimentation across the central banking community is vital to leverage the full potential of digital assets and CBDCs in particular.

Building off Phase I, the Project Cedar Phase II x Ubin+ collaboration will provide further visibility into the functionality and interoperability of multi-currency ledger networks utilising their own unique designs.”

Leong Sing Chiong

Leong Sing Chiong, Deputy Managing Director (Markets & Development), MAS said,

“Project Cedar Phase II x Ubin+ advances global efforts to evaluate the benefits of wholesale CBDCs and help build capabilities for a future financial infrastructure that is open and interoperable.

The project takes a practical approach and designs for any future wholesale CBDC to be interoperable across networks, while maintaining each network’s autonomy.”