Will Ripple’s CBDC Boost Singapore’s Financial Sector?

Will Ripple’s CBDC Boost Singapore’s Financial Sector?

  • Ripple is expanding its focus on Central Bank Digital Currencies (CBDCs) with a large practice in Singapore.
  • The company has previously collaborated with several countries on CBDC initiatives.
  • Despite Singapore’s cautious approach to digital assets, Ripple’s presence in the country has sparked speculation about potential government connections for promoting a CBDC.

Ripple has declared Central Bank Digital Currencies (CBDCs) as a crucial focus for its goals in the coming years. The company has already established collaborations with several countries, including Montenegro, Palau, and the Kingdom of Bhutan. Ripple is also pursuing numerous CBDC initiatives around the world, including the digital pound, where the company is involved with the Digital Pound Foundation. Could a Singapore CBDC be next on the list?

Ripple’s CBDC Initiatives Around the World

During the Crypto Finance Conference held in mid-January, Brook Entwistle, Senior Vice President and Managing Director at Ripple, emphasized the company’s focus on CBDCs. He highlighted the significance of CBDCs as a new suite of products for Ripple and the company’s dedication to providing holistic solutions to smaller governments and central banks. 

Entwistle also mentioned the Kingdom of Bhutan as Ripple’s first memorandum of understanding (MoU) partner, stating that the forward-looking king’s desire for a better way of moving value around the country and the eventual establishment of a remittance system could benefit from Ripple’s technology and that other governments should take note.

Ripple’s Possible Connections with Singapore’s Government

In addition to this, Entwistle revealed that Ripple has established a large CBDC practice, with four people on the ground in Singapore. This news was interpreted by the XRP community as a strong hint that Ripple may have established connections with the Singapore government or its central bank to promote a CBDC, although this is purely speculation. Entwistle concluded his remarks by saying that Ripple’s technology could play a significant role in the interoperability of CBDCs around the world.

But CBDC will be an important topic for the entire industry going forward and the interoperability between them – we think has a real opportunity for many of us around the table.

Entwistle’s remarks were well-timed given that the Monetary Authority of Singapore (MAS) had previously announced in November 2022 that they were exploring the Ubin+ wholesale CBDC project for cross-border payments. 

Despite Ripple not being mentioned in any of these announcements, the revelation of their active presence in Singapore has fuelled speculation that a Singaporean CBDC may already be in the works.

On the Flipside

  • There has been no confirmation or denial from Ripple regarding any potential connections with the Singapore government or central bank in relation to CBDCs as of this writing.
  • According to Ravi Menon, Managing Director of the Monetary Authority of Singapore, there is currently no “compelling case” for the Singaporean government to issue a national digital currency.
  • DBS, the largest bank in Singapore, in September 2022, had announced that its crypto trading services will be limited to accredited investors only, which is still the case today.

Why You Should Care

CBDCs have the potential to revolutionize the global economy and change the way people use money. Notably, CBDCs will open up the ability to facilitate borderless payments and provide improved security, faster settlements, ease of use, and low transaction costs. However, governments and institutions must also be prepared to address the challenges that come with this new technology in a timely and effective manner.

To understand more about what CBDC’s are:
CBDC Explained: Everything You Need to Know About Central Bank Digital Currency

Read more about the Central Bank of Singapore exploring a digital currency pilot plan:
Singapore Prepares Digital Currency Pilot for Government Payouts and Vouchers

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