Project Orchid identifies key infrastructure for digital currencies, focusing on CBDCs, stablecoins, and seamless transaction systems.
SINGAPORE: The Monetary Authority of Singapore (MAS) outlined foundational elements for a future driven by digital currencies on Thursday (Nov 16), unveiling critical infrastructure as part of its ambitious Project Orchid. These four components—a settlement ledger, tokenisation bridge, programmability protocol, and name service—aim to shape Singapore’s evolving financial ecosystem.
Launched in 2021, Project Orchid explores the infrastructure necessary for implementing a digital Singapore dollar. At the Singapore Fintech Festival, outgoing MAS chief Ravi Menon revealed that MAS is expanding the project with four additional trials.
“There are four contenders for digital money,” Mr. Menon explained, identifying them as privately issued cryptocurrencies, central bank digital currencies (CBDCs), tokenized bank liabilities, and well-regulated stablecoins. He emphasized that stablecoins and CBDCs, not cryptocurrencies, will dominate the financial ecosystem of the future.
Rejecting Crypto for Stability
Cryptocurrencies have fallen short as digital money, Mr. Menon asserted, due to their volatility, lack of value storage, and speculative nature. Many investors have faced substantial losses, proving their inadequacy as a reliable medium of exchange.
MAS plans to pilot the live issuance of wholesale CBDCs following successful simulations in test environments. The first pilot will explore using wholesale CBDCs for retail payment settlements between commercial banks. Future initiatives may include cross-border securities trade settlements.
Interoperable and Seamless Systems
Highlighting the importance of seamless transactions, Mr. Menon advocated for interoperable systems enabling instantaneous payment, clearing, and settlement. He noted that digital assets, digital money, and digital infrastructure must converge to achieve this vision.
MAS promotes wholesale CBDCs, tokenized bank liabilities, and regulated stablecoins to establish a foundational digital infrastructure that supports global financial integration.
“Together, digital assets, digital money, and foundational digital infrastructure can help realize the vision of seamless financial transactions across the world,” said Mr. Menon, underscoring Singapore’s commitment to innovation in financial systems.
