Singapore proposes a common standard to specify conditions for the use of digital currencies such as stablecoins, tokenized bank deposits, and central bank digital currencies. The contributors to the Monetary Authority of Singapore’s (MAS) whitepaper on digital money protocol include the International Monetary Fund (IMF), central banks of South Korea and Italy, as well as global leaders such as JPMorgan, Amazon, DBS Bank, and others.
The Monetary Authority of Singapore on June 21 published a whitepaper on Purpose Bound Money (PBM), proposing a common standard for the use of digital money as big banks and investors continue to bet on digital asset transfers and trading despite intense scrutiny from regulators.
The whitepaper proposes a common protocol to specify conditions for the use of digital money such as central bank digital currencies (CBDCs), tokenized bank deposits, and stablecoins on a distributed ledger.
The paper is part of Project Orchid, a collaboration between the MAS and industry partners to build the foundational digital infrastructure and platforms for digital currency use cases. It outlines the PBM lifecycle from issuance to redemption, as well as the protocol to interface with digital currencies supporting it.
The PBM protocol can work with multiple ledger technologies and forms of money, enabling users to access digital money using their preferred digital wallets and transfer digital assets.
Companies such as Amazon, FAZZ, and Grab are collaborating on a pilot use case for online retail payments. Escrow arrangements are designed to allow payment to be released only when the customer receives the purchased items. Moreover, the use of PBM for cashback and other incentives to improve consumer experiences is also planned.