The Monetary Authority of Singapore (MAS) has ramped upwards efforts to research and develop a central bank digital currency (CBDC) for retail utilise under the Projection Orchid initiative.

According to MAS managing director Ravi Menon, Singapore'south retail CBDC volition be developed in a partnership with private entities, which "would be the digital equivalent of today's notes and coins."

Speaking at the Singapore FinTech Festival, Menon highlighted the benefits of retail CBDCs in aiding faster and secure online transactions and building an inclusive payment ecosystem.

He as well believes that building an in-house retail CBDC can reduce the inherent investment risks when dealing with privately issued stablecoins or strange CBDCs inside Singapore's payments landscape:

"A digital Singapore dollar issued by MAS that is congruent with the needs of a digitalized economy could get some way to mitigate this take chances. Simply issuing a retail CBDC is not a straightforward decision."

Citing no urgency to the need for a retail CBDC, Menon warned that if people were to concur a bulk of their avails in the form of digital Singapore dollars, central banks would not exist in a position to provide sufficient loans:

"But nosotros can probable manage these risks by designing the retail CBDC with sensible safeguards, such every bit stock and flow caps on the amount of digital Singapore dollars that anyone is allowed to place with MAS."

MAS previously experimented with wholesale CBDCs under the proper name Project Ubin, which was aimed at identifying various apply cases in cross-edge payments. The initiative saw the launch of Partior, a blockchain-based interbank clearing and settlement network jointly established by DBS Bank, JP Morgan and Temasek.

According to Menon, Singapore will facilitate regulatory sandboxes based on existing frameworks for market testing low-chance activities in a pre-defined environment.

"With crypto-based activities, it is basically an investment in a prospective hereafter, the shape of which is not clear at this point."

Related: Singapore to position itself as global crypto centre, says regulator

Just last week on Nov. 2, Menon highlighted MAS' proactive efforts to implement "very stiff regulation" in place to reduce foreseeable threats accompanied by crypto adoption:

Back in August, Singapore-based DBS Bank was awarded regulatory approval for launching a crypto exchange, DBS Digital Commutation. Every bit Cointelegraph reported, the new license warrants the institutional trading of major cryptocurrencies, including Bitcoin (BTC), Ether (ETH), XRP and Bitcoin Greenbacks (BCH).