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Singaporean Company Launches World’s First Blockchain-Enabled Carbon Trading Exchange

AirCarbon Pte, a Singaporean exempt private company, has established the first-ever blockchain-powered carbon trading exchange (CTX) that will permit corporate buyers and airlines to sell and purchase tokens subsidized by carbon offset credits. This is based on the approval of the International Civil Aviation Organization.

According to Bloomberg, the company has appealed to the Monetary Authority of Singapore (MAS) to be given a valid market operator license as its objective is to have the carbon trading exchange entirely operational in 2020.

It is projected that some credits to trade will be generated after the exchange finances the registration costs of various carbon-mitigation projects free of charge.

CTX usually offers spot exchanges in many worldwide environmental commodity markets, such as water and renewable energy certificates. Expressly, it provides a bridge between potential investors and project developers, as well as an end-to-end solution for selling and buying credits.

It also utilizes a distinctive technical IT infrastructure that is founded on cloud computing. Blockchain is, therefore, deemed fit in propelling CTX as it will instigate immutability and transparency.

As reported by Blockchain.News on Oct. 18, CIMB Bank Singapore and iTrust successfully finished their first trade financing transaction. It was founded on iTrust’s functional Blockchain and Internet of Things (IoT) structure.

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The Future of the Financial Sector Will Rely on Blockchain, Says Singapore’s Fintech Chief

Sopnendu Mohanty, the Chief Fintech Officer of the Monetary Authority of Singapore (MAS), spoke at a panel at Blockshow Asia 2019 held at the Marina Bay Sands Expo and Convention Centre last week. In his panel on the topic of, “all that fintech with a layer of blockchain,” he explains the MAS’ role for blockchain adoption in Singapore and Asia. Mohanty said:

“Billions of the future of the financial sector relies on this whole shift from a physical to a digital world. Because there are certain financial stability implications, if you’re going with the right technology, but you don’t understand the relevance of the new technology, you may actually not have a lot of customers in the whole space. How to get to the right space is a big part of our effort.”

The Chief Fintech Officer further explained that the regulator’s job is to be relevant to the people they serve and to be meaningful to the community and be responsible for showing that the financial services are relevant to the way it is designed today, as it can be designed for the future.

The MAS’ approach has been very different from a lot of global central banks. Mohanty commented: “I will say that we have been very different in our strategy. We have been very experimental in our approach, and we have been highly inclusive in taking new ideas.”

Two major projects to look out for in Singapore

The first major project was the Singapore Blockchain Ecosystem Report, in which the MAS collaborated with ConsenSys, Tribe Accelerator and Infocomm Media Development Authority (IMDA), and Temasek for the first joint public-private review of the local blockchain ecosystem.

The second is Project Ubin, which was announced first at the Singapore Fintech Festival the same week. Project Ubin started in 2016 and has entered stage 5, and Mohanty believes that what the regulator has learned and, in his view, “blockchain is going to be the future architecture of our financial sector, it has to be.”

“I say that with a lot of risks because if you look at the digital world, there are three big positives: face-less, presence-less and people-less,” explained Mohanty. He stated that these are the good factors in the online world that we are currently dealing with. “But there’s one negative thing, which is trust-less. It was almost counterproductive to this whole positive thing, and the only platform that can get customers to trust in the blockchain world.”

Those who are investing their money and time on blockchain, “don’t lose hope”

He further added: “If we don’t invest in this technology [blockchain], we will lose focus and discipline in trust. I think we have a problem unless there’s a better thing that comes in the near future, but that’s the genesis of trust.” Mohanty explained that the MAS took it on its financial payment system as a use case to drive this concept.

The results of the experiment concluded that blockchain would be very useful in the cross-border payment system, as well as the trade finance space.

By 2020, the MAS is expected as the year of huge production lines for blockchain. By 2020, Mohanty said that the MAS would get to one product grade case in the blockchain space. Mohanty directed at those who were investing their money and time on blockchain and said, “don’t lose hope.”

The only regulator that took this whole thing seriously

Regarding Xi Jinping’s recent announcement for encouragement in the blockchain space, Mohanty commented: “I think there’s no bigger announcement vigorous endorsement for the world of blockchain what presence is happening since China announced [the news], I think everybody in China is talking about blockchain.”

Redirecting the focus back to Singapore’s regulatory environment, Mohanty claimed: “People don’t realize in Singapore, especially we put a huge bet on this technology three years ago, but everybody in the world was dismissing blockchain as a hype, you know we are the only regulator and institution, that took this whole thing seriously.”

Singapore Payment Services Act Now in Effect For Crypto Firms

Cryptocurrency firms in Singapore must now operate in compliance with the Payment Services Act which came into effect on Jan. 28.

The new legislation requires cryptocurrency providers and exchanges to be licensed under some of the same regulatory elements as traditional financial service providers. In addition, crypto firms must also comply with the Financial Advisers Act, Insurance Act, Securities and Futures Act and the Trust Companies Act.

MAS New Rules

According to a press release published on Jan. 28, the new rules place cryptocurrency firms under the oversight of the Monetary Authority of Singapore (MAS).

Loo Siew Yee, Assistant Managing Director, MAS said in the release, “The Payment Services Act provides a forward-looking and flexible regulatory framework for the payments industry. The activity-based and risk-focused regulatory structure allows rules to be applied proportionately and to be robust to changing business models. The PS Act will facilitate growth and innovation while mitigating risk and fostering confidence in our payments landscape.”

Standard Operating Licenses

Essentially, the new regulations require, cryptocurrency and digital asset providers to apply for standard operating licenses that traditional financial firms would also be required to obtain, these include—standard payments institution license; money-changing license and a major payment institution license.

The press release stated that applying these standards to the emerging digital asset services will, “enhance the regulatory framework for payment services in Singapore, strengthen consumer protection and promote confidence in the use of e-payments.”

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Binance Reaching a Larger User Base by Applying for Singapore’s New Crypto License

Crypto exchange Binance has applied for a license in Singapore under the country’s Payment Services Act, a new framework that came into effect on Jan. 28.

The new act requires cryptocurrency-related businesses that are operating in Singapore to be registered and licensed under one of three licenses: money-changing license, standard payment institution, or major payment institution license. The Monetary Authority of Singapore (MAS) would be able to utilize its formal supervisory powers to control cybersecurity risks on money laundering and terrorism financing.

Binance hopes to reach a larger user base in Singapore, as the jurisdiction allows for a more regulatory-compliant environment. The Payment Services Act is the first comprehensive regulation for companies dealing with digital payments and trading of cryptocurrencies such as Bitcoin and Ether.

Although Binance’s Singapore unit has not yet clarified which of the three categories the company has applied for the, Binance CEO Changpeng Zhao (CZ) told Bloomberg in an interview that the application has already been submitted and the company has already applied. “We submitted the application pretty fast. Binance’s Singapore entity has been in close touch with the local regulators, and they have always been open-minded.”

Blockchain.News previously interviewed CZ, to learn more about the company’s upcoming developments in the industry.

Gemini Eyes Singapore Expansion With New Asia Pacific Managing Director

The Gemini crypto exchange has set its sights on an expansion into Singapore with the appointment of a Managing Director for the Asia-Pacific region.

The Gemini crypto exchange, owned and operated by the Winklevoss’ Twins, has set its sights into a further expansion into the Asian market with the hiring of Jeremy Ng as Managing Director for Asia Pacific. Ng was formerly the CEO of Leonteq Asia.

According to the Singapore 2019 Payment Services Act, any exchange operating within the country must have at least one Singaporean citizen or permanent resident serving on its board of directors. The appointment of Ng will now allow Gemini to apply for the license through the official channels.

According to the release, Ng will report directly to Gemini’s President Cameron Winklevoss and will be responsible for the overall strategy and team setup in Singapore and Southeast Asia.

“Southeast Asia is an important part of the crypto movement. The Monetary Authority of Singapore has developed thoughtful regulation that is paving the way for further adoption and innovation. We look forward to building a presence in this major Fintech hub and the Asia Pacific region with Jeremy leading the way,” said Cameron Winklevoss, President of Gemini.

Gemini’s Ever-expanding Exchange

The Winklevoss twins’ crypto exchange Gemini is the next step in the unbelievable success story of the brothers – who appear to be lightning rods for success and unbelievably good ideas.

As made famous by the film, “The Social Network” – brothers Tyler and Cameron Winklevoss came up with the idea for Facebook and enlisted the help of Mark Zuckerberg, who had the technical prowess, to create it.

Following a court ruling in the legal battle against Zuckerberg for the rights to Facebook, the brothers were finally awarded a $65 million settlement for their claims. The Winklevoss’ invested $11 million of their settlement into Bitcoin (BTC) in 2013 and became the world’s first crypto billionaires in 2017 when the Bitcoin price began to gain exponentially.

Since then the hits have just kept coming as the Winklevoss’ appear to move from one good idea to the next and established the Gemini cryptocurrency exchange in 2014 to empower other individuals through cryptocurrency.

With more than 250 employees, Gemini is now ramping up its global footprint. The appointment of Ng for their Asia Pacific expansion is just the latest addition to an incredibly accomplished group of senior leaders who have already joined Gemini, including Julian Sawyer who is heading up Gemini Europe’s expansion as well as Noah Perlman as Chief Compliance Officer, David Damato as Chief Security Officer, Sydney Schaub as General Counsel, Jeanine Hightower-Sellitto as Managing Director, Operations and Robert Cornish as Chief Technology Officer.

MAS Completes CBDC Project Ubin Phase 5, Blockchain Sector Sees Major Growth Despite COVID-19

The Monetary Authority of Singapore (MAS) introduced Project Ubin in November 2016, along with its partnership with R3, to build a proof-of-concept project to conduct inter-bank payments using blockchain.

Project Ubin, spearheaded by the MAS, is a project exploring the use of blockchain and distributed ledger technology (DLT) for clearing and settlement of payments and securities. In the current phase, Phase 5 has experimented with the commercial viability and value of blockchain-based payments network, to test out its ability to integrate with commercial blockchain applications.

Singapore FinTech Festival 2019 saw the first cohort of successful use-cases blockchain applications, including projects such as CapBridge, Hashstacs, Digital Ventures, and Digital asset. They showcased their blockchain-based applications, to test out integration within the Ubin prototype network for transaction processing.

According to Sopnendu Mohanty, the Chief FinTech Officer of the MAS, Project Ubin created the ecosystem regulatory stance and innovation effect in the blockchain industry. As Singapore houses a vibrant foundation and community in the FinTech space, the blockchain landscape has seen major growth in the past year despite the COVID-19 pandemic. “Many of those [companies] in the MAS regulatory sandbox have something to do with DLT,” said Mohanty.

“2020 is the year of production for DLT despite COVID-19. The need for a DLT construct has become more impotent in light of recent events.”

Project Ubin: Phase 5

Mohanty announced at the Unitize 2020 virtual event, that Phase 5 of Project Ubin has been completed, and partners of the project are already working on a production in the payments space. A new report is to be expected in the next few days, which will “articulate the last phase of experimentation of Project Ubin.” He hinted that the production is related to exchange, settlement, and will be working on releasing production inspired by Project Ubin Phase 5.

Regarding COVID-19 stimulus payouts seen in many countries, in the US in particular, has found its unemployment systems vulnerable. Criminals have been funneling millions of dollars in payments that were intended to support the detrimental effects the coronavirus pandemic had on the economy, according to federal authorities in the US. The unemployment crisis in the country has surpassed the rate since the Great Depression, as the official US unemployment rate is at its highest in recorded history, at an alarming 14.7 percent.

These fraudsters may have leveraged detailed information about US citizens, including social security numbers, which have been obtained from previous cyber attacks. The attackers have also filed claims on behalf of people who have not been laid off, according to officials.

With the immutable and transparent features of blockchain, it is believed that technology could potentially eliminate bad actors who are conducting such cyber crimes. Blockchain’s tracking ability could also mean transparency in the relief methods, ensuring that the funds reach their intended recipients. With many governments trying to stimulate the economy, distributing money to citizens has been challenging in these recent months. Mohanty suggested that with a proper DLT construct in place, there would be a more secure and efficient way for stimulus support to reach their intended recipients through these challenging times.

Is Singapore considering a CBDC?

Singapore has taken many steps for digitization in its country and has been recently reported that it is looking to cooperate with China with the development of a central bank digital currency (CBDC). China’s CBDC, also known as digital currency electronic payment (DCEP), aims to replace M0, the physical cash supply in the country.

Meng Wenneng, the Director of the MAS made it known that the country’s project can benefit from China’s advancement on similar projects. Meng said:

“The central bank of China is very active in this area. Singapore and the central bank of China have a lot of exchanges, and both sides are discussing the CBDC-related landing scenarios.”

Mohanty mentioned that the MAS is “giving it a fair chance” to explore a CBDC, however, he added that Singapore does not have a dire need for CBDCs. In the retail aspect, some experiments have been ongoing, as well as discussions, and further exploring is needed before making a directional move.

Singapore’s blockchain ecosystem: What does the future hold?

Many of the Fortune 500 companies have looked into blockchain on a more serious note, said Yi Ming Ng, the CEO of Tribe Accelerator.

He expects blockchain-related initiatives to grow over the next few years. Tribe currently works with over 70 organizations supporting the blockchain ecosystem including government agencies, startups, corporates, and universities.

In the next three years, Ng said that he hopes Tribe will be able to gain more collaborations, as blockchain is a collaborative technology. He further expects to build momentum with governments, “to drive the ecosystem forward,” as Singapore is one of the leading blockchain foundations in Asia.

Regarding OpenNodes, the innovation thinktank backed by Tribe, Ng mentioned that there will be more content expected in the rest of Q2 2020, as well as more collaborative partnerships, corporate engagements, and startup activities running in the next few months.

China and Singapore

OpenNodes recently partnered with China’s top digital bank, WeBank to bring China’s FISCO BCOS blockchain platform to Singaporean academics for innovation and new initiatives.

FISCO BCOS was deemed to be China’s version of Hyperledger Fabric when it was launched in 2018. The Financial Blockchain Shenzhen Consortium (FISCO) is backed by more than 100 Chinese organizations, including Huawei, Tencent, JD Finance, and WeBank, which is partly backed by Tencent. Developed by FISCO, the enterprise blockchain protocol was the first blockchain to be supported by China’s Blockchain Service Network.

This also became the first move in taking FISCO BCOS international, which also support the Blockchain Services Network’s ambition to go global.

Image source: Joshua Ang via Unsplash and Shutterstock

MAS Announces Project Ubin’s Successful International Settlement Network in its Final Phase Report

The Monetary Authority of Singapore (MAS) and government-owned conglomerate Temasek released the final report of the Singaporean CBDC project, Project Ubin. The report is the fifth and final phase of Project Ubin, Singapore’s blockchain-based multi-currency payments network prototype that was built for the financial industry and blockchain ecosystem.

Singapore’s central bank introduced Project Ubin in November 2016, along with its partnership with R3, to build a proof-of-concept project to conduct inter-bank payments using blockchain.

The goal of the project was to understand what kind of potential benefits blockchain technology can bring, and the MAS had a goal of developing simple-to-use alternatives to current systems based on central bank-issued digital tokens.

The project has since taken a multi-phase approach; where the first two phases focused on building technology capabilities for domestic payments network, the next two on the interoperability of blockchain-based networks for delivery-versus-payment, and cross-border payment-versus-payment.

The blockchain-based network developed during Phase 5 of Project Ubin successfully settled payments in different currencies on the same network. This international settlement network could enable faster and cheaper transactions than conventional cross-border payments channels. Chief FinTech Officer of the MAS said:

“As with all innovation adoption, there is a time for experimentation, and a time for commercialisation. Project Ubin has worked with the financial industry and blockchain community on a journey of experimentation, prototyping and learning. This has built a strong foundation of knowledge, expertise and experience, and paved a path towards commercial adoption. Following the successful experimentation over five phases, we look forward to greater adoption and live deployment of blockchain technology.”

JP Morgan’s Quorum and JPM Coin for the Ubin V payments network

JP Morgan led the technical development workstream, leveraging its enterprise-grade blockchain Quorum platform, and its JPM Coin to develop a production-ready payments network.

The Quorum platform was used for the production-grade capabilities developed as part of the Interbank Information Network (IIN), while the JPM Coin will be leveraged to develop a production-ready payments network. Quorum was developed as a fork of the Ethereum blockchain and was made open-source by JP Morgan, and has extensions including transaction and contract privacy, higher performance and settlement finality over the public Ethereum network.

Accenture led the use of case development workstream, which merged with JP Morgan’s technical development workstream for connectivity and integration testing. Accenture identified 124 projects with use cases that could benefit from using the Ubin payments network, with the support from the MAS and Temasek.

Project Ubin has a view of that the future world would require different ecosystems to be linked together by multiple blockchain networks, to provide different services, operating on different platforms and technical infrastructures.

The Ubin V network was built with an emphasis on open architecture, open connectivity, and interoperability for the ease of integration across different networks for seamless end-to-end transaction processing.

The Ubin payments network consists of five components — ledger interoperability service, gateway communication service, blockchain ledger, user connectivity interfaces, and digital currency.

Technical Architecture Design. Source: Project Ubin Phase 5, MAS

The future of the Ubin network

Although the project focused initially on the financial services industry, Project Ubin also explored the benefits for use cases for providing services in exchange for value, including media and advertising.

Salary payments were also looked at as a potential use case, as it is expected that the global gig economy will grow 17 percent annually to 2023, Singapore with the greatest growth in the Asia-Pacific region, according to the report.

After phases of research and experimentation, Project Ubin concluded that the industry will gear up towards commercialization and live projects. The report added:

“With a clearer understanding of the benefits and the business value, there will be further commercial adoption and live implementation of the technology for viable use cases.”

Image source: Duy Nguyen via Unsplash

MAS Proposes New Regulations to Tighten Crypto Business Activities

The Monetary Authority of Singapore (MAS) has published a consultation paper proposing a new set of regulations that may stiffen the emergence and activities of crypto industries in the country.

Despite the proactive strides of the MAS towards the development of the country’s central bank digital currency (CBDC), the apex bank is set to reinforce its regulations on digital currencies.

The new regulation which seeks to “Enhance Effectiveness” in Addressing Financial Sector-Wide Risks has four basic provisions. These provisions give MAS the power to prohibit unsuitable individuals from working in the financial industry. It will also expand the scope of anti-money laundering and countering the financing of terrorism (AML/CFT) requirements to persons in Singapore who provide digital token services overseas in line with the Financial Action Task Force (FATF) guidelines.

In addition, it will strengthen the framework for technology risk management, and enhance the effectiveness of dispute resolution.

How this will impact cryptocurrency businesses

The move by the MAS will go a long way in protecting Singaporeans from unsuitable entities who can increase the risk already associated with the crypto ecosystem. Over time, the government of Singapore has been proactive in calling out crypto-related scams to guard its citizens for scandalous investments.

With enhanced powers, the MAS will also have extensive oversight responsibilities on indigenous crypto firms who conduct businesses abroad. The consultation paper reads:

“Given the internet-based nature of such operations, there may be entities created in Singapore that do not perform such services in Singapore but offer such services outside of Singapore and that are not captured under current legislation. MAS intends to regulate such entities for ML/TF [money laundering/terrorist financing] risks.”

As evident in recent times, the Monetary Authority of Singapore is pacing faster in its CBDC Project Ubin development which successfully completed an International settlement earlier this month. While the new regulation appears strict, it will help legitimate crypto businesses thrive as the MAS has acknowledged the role of blockchain technology as the future of the financial sector.

Monetary Authority of Singapore Sets Up New Institute of Digital Finance for Boosting Fintech and Digital Asset Research

The Monetary Authority of Singapore (MAS) has teamed up with the National Research Foundation, and the National University of Singapore to set up a research institute that will develop and support the needs of digital financial services in Asia.

Jointly developed by the three entities, the Asian Institute of Digital Finance (AIDF) will strengthen education, research, and entrepreneurship in digital finance in the region.

According to the MAS announcement, the AIDF will focus on inter-disciplinary research projects on digital infrastructure, performance optimization, anti-money laundering, cyber fraud, and business processes.

In developing financial services in Asia that will be able to meet sustainability and resiliency needs, the MAs said that the potential areas of focus include digital assets and ledger technology, artificial intelligence (AI), machine learning, digital finance platforms, and 5G networks.

Ravi Menon, the Managing Director of the MAS said:

“AIDF will be an important addition to Singapore’s rich and vibrant FinTech ecosystem. Through applied research and active collaboration with industry, AIDF will help to build strong capabilities in digital finance and FinTech. Located in the heart of the fastest-growing digital finance market in the world, the Institute will facilitate the expansion of knowledge and skills among FinTech leaders in the region and support the digitalization of economies in ASEAN and beyond.”

Sopnendu Mohanty, the Chief FinTech Officer at MAS wrote, “We hope in years to come; we will build a diverse and strong AIDF alumni network of international leaders who will serve the digital finance needs of Asian Market and beyond.”

The MAS proposes new regulations for the crypto industry

The MAS published a consultation paper in late July 2020, proposing a new set of regulations that may stiffen the emergence and activities of crypto industries in the country.

The new regulation which seeks to “Enhance Effectiveness” in Addressing Financial Sector-Wide Risks has four basic provisions.

These provisions give MAS the power to prohibit unsuitable individuals from working in the financial industry. It will also expand the scope of anti-money laundering and countering the financing of terrorism (AML/CFT) requirements to persons in Singapore who provide digital token services overseas in line with the Financial Action Task Force (FATF) guidelines.

With enhanced powers, the MAS will also have extensive oversight responsibilities on indigenous crypto firms who conduct businesses abroad.

MAS Shortlists 15 Firms to Help Pilot its CBDC Program

The Monetary Authority of Singapore (MAS) has selected 15 firms with vested interests in the digital currency space to help develop its retail Central Bank Digital Currency (CBDC).

As published by the apex bank, the streamlined firms include six countries in total, including the host nation, Singapore. The rest of the four are from the United States of America, Australia, Barbados, Germany, France and Switzerland.

These candidates were shortlisted from a list of 300 competing firms who put their hands in the race as prompted by the MAS back in June. Of these numbers, only three winners will be selected to help the apex bank in its pursuit to deploy a functional retail CBDC in the Asian nation.

Among the companies selected include Citibank Singapore, blockchain consulting firm, ConsenSys, and enterprise leader IBM. Each of these firms has a notable product offering that will be pitched to the MAS at the forthcoming Singapore FinTech Festival, which is scheduled to take place from Nov. 8 to Nov. 12, 2021. Following these presentations, the best three firms whose solutions align better with the MAS CBDC framework will be chosen for the task ahead.

The MAS said in an earlier announcement that it would be providing adequate support to the firms participating in its global CBDC challenge. As noted by the bank, the shortlisted candidates will “be given access to the APIX Digital Currency Sandbox for rapid prototyping of digital currency solutions.

The Sandbox will offer a comprehensive test and development platform that includes core-banking APIs from APIX, payment APIs from Mojaloop Foundation, digital currency APIs from Mastercard, Partior and R3, and more than 100 APIs provided via the APIX marketplace.”

The boosted efforts to get its CBDC underway compliments the global efforts by central banks worldwide to develop and launch their own CBDCs. The latest with notable advances include the Central Bank of Nigeria (CBN) and the People’s Bank of China (PBoC).