The Monetary Authority of Singapore (MAS) announced the launch of a global challenge for retail central bank digital currencies (CBDCs).
With its Global CBDC Challenge, the MAS hopes to attract financial technology (FinTech) companies, and financial institutions around the world. It invites them to submit innovative solutions regarding a CBDC instrument, its distribution and its infrastructure. The challenge will consist of 12 problem statements curated from partner organizations from around the world.
The MAS is launching the challenge in partnership with several global economic organizations. These include the International Monetary Fund (IMF), the World Bank, and the Organization for Economic Co-operation and Development (OECD). Additionally, several UN agencies are involved, including the UN Capital Development Fund, High Commission for Refugees, and Development Program.
The announcement highlights some of the potential benefits that retail CBDCs could provide. Among them include increasing payments efficiencies, improving financial inclusion, and supporting digitalization of the economy. However, it stresses that retail CBDC solutions must meet a certain number of public policy objectives.
A solution needs to be cost-effective to implement, while still addressing current and anticipated payment needs of the consumer. It also has to be accessible to a full spectrum of users, which includes lower-income households, and the less tech-savvy. Its design should also “contribute to financial system resilience and integrity, and be consistent with monetary and financial stability.”
Many monetary authorities around the world are currently developing CBDCs. However, most of these developments are for wholesale CBDCs, which will facilitate central bank level payments. However, some are also considering retail CBDCs, which consumers and businesses will be able to use like cash.
Interested parties should submit their applications for the Global CBDC Challenge by July 23. Afterwards up to 15 finalists will be selected to receive mentorship from industry experts. They will also be given access to a digital currency development sandbox to rapidly prototype digital currency solutions. The sandbox offers a comprehensive test and development platform, which includes a host of different application programming interfaces (APIs).
The chosen finalists will pitch their solutions to a global audience on Demo Day. This will be held at this year’s Singapore FinTech Festival. Out of the 15 finalists, up to three winners will be selected, who will each receive S$50,000 in prize money.
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