Home Digital Currencies Singapore authority announces CBDC competition finalists

Singapore authority announces CBDC competition finalists

Singapore: the CBDC contest winners will be crowned in November | Credit: Monika Neumann; Pixabay

Major international banks, fintech companies and tech providers are among the finalists in a global competition being run by the Monetary Authority of Singapore (MAS) to develop retail central bank digital currency (CBDC) solutions.

MAS this week announced 15 finalists for its ‘Global CBDC Challenge’, with the winners to be decided at the Singapore FinTech Festival from 8-12 November.

The contest comes as an increasing number of central banks worldwide start experimenting with retail CBDCs (also known as ‘general purpose’ CBDCs – CBDCs that would be available to the general population) – albeit most of those doing so, including MAS, have yet to commit to launching a CBDC.

Those entering the competition were invited to address 12 problem statements covering topics such as inclusivity, interoperability and programmability – important topics for central banks as they explore the opportunities and obstacles entailed by CBDC. MAS stipulated, for example, that proposed solutions must be accessible to a ‘full spectrum of users’, including lower-income households and people who struggle with technology.

MAS states that the competition’s overall aim is to develop solutions that will benefit all those who are investigating the possibilities of CBDC globally.

Fifteen finalists from 300-plus entries

The Global CBDC Challenge attracted more than 300 submissions from more than 50 countries, with more than half of the submissions coming from Asia.

The biggest names among the finalists are global tech giant IBM, as well as four banks: Australia-headquartered ANZ; Citibank (Singapore branch); HSBC (Singapore); and Standard Chartered Bank.

Two companies that are well known in the digital money space are US-headquartered blockchain firm Consensys and Germany-headquartered Giesecke+Devrient (its entry is G+D’s ‘change accelerator’ advance52).

The further eight finalists are: Barbados-based fintech company Bitt (which developed the Eastern Caribbean Currency Union’s DCash CBDC); cLabs, an organisation behind the Celo mobile-first blockchain platform; Japanese blockchain firm Soramitsu (which developed Cambodia’s ‘Bakong’ digital payments platform); US-headquartered digital payment and identity platform Extolabs; plus there are two Singapore-based firms, IOG Singapore and Xfers; and two French firms, IDEMIA and Criteo.

The finalists were selected by a judging panel comprising policy and technical experts, academia and representatives from some of the competition’s inter-governmental organisation partners.

APIX Digital Currency Sandbox awaits

The 15 finalists will take part in an eight-week ‘acceleration phase’, during which they will develop and refine their projects. There will also be weekly ‘masterclasses’ covering topics crucial to the development of a ‘robust’ retail CBDC. The teams will then pitch their solutions at the festival, which is promoted as the world’s largest fintech event and is due to take place in a hybrid (digital and physical) format.

The 15 finalists will also be given access to the API Exchange (APIX)’s Digital Currency Sandbox to further help with prototyping their digital currency solution. APIX is a not-for-profit entity formed by MAS, the International Finance Corporation and the ASEAN Bankers Association with the aim of supporting financial innovation and inclusion globally.  

During the Global CBDC Challenge’s ‘Demo Day’ at the festival, the finalists will present their innovations and the top three will win S$50,000 (about £27,000) each.

All 15 finalists will also be fast-tracked in applications for grant funding of up to S$200,000, under a MAS Financial Sector Technology and Innovation (FSTI) Proof-of-Concept Scheme. This provides funding for experimentation, development and dissemination of nascent innovative fintech projects.

“The Global CBDC Challenge aims to discover and develop retail CBDC solutions that will benefit the global community,” said MAS chief fintech officer Sopnendu Mohanty. “We are encouraged by the strong interest from established financial institutions and emerging fintechs alike. There was a healthy diversity of solution approaches across the different problem statement categories. We look forward to showcasing the shortlisted solutions.”

Singapore’s CBDC pedigree

Although MAS has yet to commit to launching a retail CBDC, Singapore has a relatively high profile in CBDC (and related) circles through its ‘Project Ubin’, a public-private initiative exploring the use of blockchain to clear and settle payments and securities; and involvement in ‘Project Dunbar’, a Bank for International Settlements (BIS) Innovation Hub (Singapore centre)-led initiative exploring governance and connectivity models for cross-border transactions using multi-CBDCs.

The Global CBDC Challenge, which was announced in June, is being partnered by the International Monetary Fund, World Bank, Asian Development Bank, United Nations Capital Development Fund, UN High Commission for Refugees, UN Development Programme and the Organisation for Economic Co-operation and Development (OECD).

The Bank for International Settlements (BIS) set out its recommended approach to fundamental elements of CBDC design in June, stating a preference for account-based systems built on digital ID.

*** MAS and the BIS Innovation Hub are organising a webinar entitled ‘Retail CBDCs: Global Landscape’ on 9 September. The hour-long webinar will see BIS’s principal economist, Raphael Auer, present CBDC architectures, review approaches being pursued around the globe and lessons learnt.