Monetary Authority Of Singapore Announces Successful Live Trial Of Settlement Of Interbank Overnight Lending Using Wholesale Central Bank Digital Currency

The Monetary Authority of Singapore (MAS) today announced the successful completion of a live trial for settlement of interbank overnight lending transactions using wholesale Central Bank Digital Currency (CBDC) on the Singapore Dollar Test Network  [1]. SGD Testnet is an operational shared ledger infrastructure that enables financial institutions (FIs) to test the settlement of tokenised financial assets using wholesale CBDC. The trial involved DBS, OCBC, and UOB as participating FIs, and featured the first live issuance of Singapore dollar wholesale CBDC, with transactions recorded in the banks' official books and regulatory filings.

2 The SGD Testnet provides three core functionalities for participating FIs:

• Common Settlement Asset: Enable the issuance, transfer and redemption of Singapore dollar wholesale CBDC to settle tokenised asset transactions, reducing settlement risk and market fragmentation. 
• Programmability: Develop and deploy conditional logic associated with counterparty agreements governing payment arrangements to ensure real-time execution of contractual terms based on predefined conditions. 
• Multi-Asset: Support atomic settlement of both cash and securities components of transactions, eliminating settlement risk that exists when cash and securities settle at different times or through different systems.

3 MAS will build on this CBDC settlement pilot, and plans in a future trial, to issue tokenised MAS Bills to Primary Dealers which will be settled using CBDC. More details of this future trial will be shared in 2026.

***

[1] MAS announced on 4 Nov 2024 plans to advance asset tokenisation through commercial networks, market infrastructure development, industry frameworks, and the facilitation of access to common settlement assets.