The Monetary Authority of Singapore (MAS), the city-state's de facto central bank, has released a new report focused on the second phase of its Project Ubin blockchain initiative.

The project aims to harness the capabilities of blockchain systems across several financial services and includes a search to find solutions to improve the efficiency and security of letter of credit (L/C) transactions.

Project Ubin aims to digitise trade documents, automate processes and reduce fraud risk while helping to eliminate human errors from the document sharing process.

Report findings

The report looked mainly the second stage of the project. It focused on three platforms - Hyperledger Fabric, R3's Corda and JPMorgan's ethereum-based Quorum - all of which may be of utility in blockchain L/C solutions.

Software developer R3 for example has launched version 1.0 of its Corda distributed ledger platform that could be critical for the development of digital L/Cs based on the system originally developed for crypto-currencies (DC World News, 13 October 2017).

The MAS report found that all the platforms tested could serve as bases for distributed ledger-based systems.

Central banks redundant

The report also found that if such systems were adopted, central banks in some of the roles they now play would be made redundant.

"The conventional role of a central bank or payment system operator as the centralised infrastructure operator in the ecosystem will be obsolete," the MAS report says.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.