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Bitcoin-friendly Singapore wants to team up with China for “Digital Yuan,” here’s why

Bitcoin-friendly Singapore wants to team up with China for “Digital Yuan,” here’s why

Photo by Swapnil Bapat on Unsplash

East Asian nations are forging ahead with their digital currency and blockchain plans, with most being largely lenient towards large-cap digital assets like Bitcoin.

Singapore, the tiny island-nation known for its shipping and finance industry, wants to team up with China for the latter’s upcoming Digital Yuan project.

Singapore already has regulations in place for Bitcoin exchanges and pertinent crypto-services, and working on a digital currency project was, presumably, a logical extension of the country’s overall fintech and blockchain policy.

Digital currencies the next frontier

At a financial forum held in Shanghai last week, the managing director of the Monetary Authority of Singapore (MAS), Ravi Menon, said the central bank was willing to join forces with China in terms of blockchain technology and the advancement of digital currencies.

Singapore could team with China on Digital Yuan. (Source: Flickr)

Menon said Singapore is open to “close cooperation,” ahead of China’s exuberated push towards digital currencies. As CryptoSlate reported earlier, the latter wants its digital yuan developed before the 2022 Winter Olympics in Beijing.

China considers blockchain technology a big part of its ambitious Five-Year-Plan, and Singapore is not far behind. The self-styled Lion State was among the first global powers to tax cryptocurrencies and legally classify them as “goods.”

At the forum, Menon said China was advancing quickly with the Digital Yuan, and the prospects of a jointly-developed CBDC could help ignite increased development, collaboration, investments, and knowledge between the two nations.

Different goals

Menon noted CBDCs are a “hot topic,” with France, the U.S., Japan, South Korea, and other nations either already developing digital currencies or conducting research in the field.

He added that each country has a specific end-goal that varies with broader economic objectives, but the main goal — that of reducing costs in cross-border transactions — remained cognizant.

Meanwhile, Menon indicated Facebook’s Libra project was a challenge for central governments, as Sina Finance quoted:

“The project has great flexibility, while the Libra team is committed to working closely with global regulators. We should not reject the value of Libra, but should have more discussions with them.”

China’s rising influence

Even if brought to fruition, the digital yuan project won’t be Singapore’s first foray into blockchain technology.

In 2016, the MAS started work on a blockchain-based interbank currency settlement system, called “Project Ubin.” Later in 2018 and again in 2019, the regulator oversaw inter-border bond settlements worth millions of dollars, using an enterprise version of the Ethereum blockchain.

China’s blockchain and digital currency rise is not going unnoticed. As CryptoSlate earlier reported, South Korea is said to be “concerned” with the former’s growing dominance and technological progress with the two disruptive technologies.

Korea, in response, has earmarked $400 million for blockchain- and crypto-focused R&D, with regulators indicating the economic implications for falling behind on relevant development, would be massive.

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