The Monetary Authority of Singapore (MAS) has started a project to study the technical aspects of developing a retail CBDC, as stated by the head of the regulator Ravi Menon at the annual fintech conference.
According to him, MAS recognizes the potential of CBDCs, but does not consider the arguments in favor of its launch “convincing enough.” He has noted cash will be used “for quite a long time,” and has called the possibility of crowding out the national currency by foreign digital assets “a distant collateral risk.”
Menon has explained most Singaporeans already have bank accounts, and electronic payments in the city-state have proven to be effective.
However, the MAS wants to be ready for the release of a CBDC if it becomes necessary. To this end, the Office has initiated the Project Orchid program, which will focus on the study of the technological infrastructure and technical solutions designed to issue the national digital currency. He added:
“Issuing retail CBDCs is ultimately a socio-economic, not a monetary, consideration.”
According to the official, CBDC can carry “significant risks to monetary and financial stability,” especially during periods of crisis, but they can be managed.
Throughout 2021, MAS has paid increased attention to the national digital currency.