Deputy Prime Minister Wong sets the fintech agenda

Welcoming attendees back to an in-person event, Wong referred to the huge turnout, stating that this has proven that “human interaction is indispensable even in our digital age.” He also highlighted that impromptu meetings at the event can lead to the next breakthrough innovation, and with technology companies and countries can become more robust.

Wong described Singapore as a “red dot in a dangerous world” that must ultimately rely on itself to survive and thrive. By embracing “a healthy level of constructive paranoia” and working through what he referred to as “divine displeasure”, Singapore as a nation maintains its motivation to push the envelope and improve standards.

When hit by Covid-19, Wong explained that it was earlier, pre-pandemic investments in digital infrastructure that helped keep Singapore afloat and continue to provide basic financial services to its citizens.

Purpose-built digital Singapore dollar to be trialled

This week, MAS released a report detailing potential uses for a purpose-built digital Singapore dollar (SGD) and the necessary supporting infrastructure, marking the successful completion of Phase 1 of Project Orchid. By enabling consumers to specify conditions such as when and where digital money can be used, this opens up the potential for a multitude of use cases. In an effort to trial the use of earmarked money in the form of digital Singapore Dollar-backed vouchers, attendees of the Singapore Fintech Festival will be able to make purchases with this digital currency at participating merchants at the event itself.

Questions about cross-border payments to be handled

Although Singapore’s PayNow allows individuals to transfer money instantly to each other with just their mobile numbers or to businesses using their unique device numbers 24/7, Wong revealed that by 2021, the world’s first link of real-time payment systems will be established. This was between PayNow and Thailand’s PromptPay. They are also working on building corridors to Malaysia and India.

Support MSMEs and develop integrated trade and financial ecosystems

Wong disclosed that MAS will work with partners such as in-country government entities for Ghana, with UNCDF for the world’s least developed countries, and IFC globally on financial literacy and building financial confidence. Wong added: “Apart from empowering small businesses, technology can help individuals take better care of themselves. Planning for your finances is a step towards having less stress in your life, and building a more robust financial future.”

SGFinDex to include insurance data

In his keynote speech, Wong also announced that individuals will be able to view their policies with insurance companies via SGFinDex, making it easier for Singaporeans to identify potential gaps in their protection, and have a more comprehensive view of their financial positions. “Going forward, we hope to integrate more financial institutions and a wider range of financial information on SGFinDex for an even more comprehensive overview and greater convenience in financial planning,” Wong said.

Cryptocurrency = risky; distributed ledger = transformative

Wong was unequivocal about Singapore’s position on cryptocurrency: “MAS has clarified our stance on speculative trading of cryptocurrencies by retail investors – we believe this is highly risky, not suitable for the public, and we aim to reduce the risk of potential harm to consumers. But there should be no doubt that we fully embrace the underlying technologies of distributed ledgers and their potential to transform financial markets. In short, we aim to become a center for innovative and responsible digital asset activities.” This has been proven with the launch of Project Guardian. They have successfully completed the first industry trials, with cross-currency transactions and tokenized securities trading, and will work to sharpen the digital asset strategy in Singapore.

MAS works with KPMG and the Singapore FinTech Association to identify ESG use cases

In addition to investing in new technologies that can help decarbonize the economy, such as the use of low-carbon hydrogen, Singapore recognizes that the current ESG fintech landscape is still nascent. MAS will work with KPMG and the Singapore FinTech Association to identify key use cases and growth strategies in this area.

MAS will provide FSTI with new funding of S$150 million for the next three years

After introducing the Financial Sector Technology and Innovation Scheme, or FSTI, to support the creation of a vibrant ecosystem for innovation in the financial sector, MAS has provided two rounds of funding. “During the first tranche, we awarded over S$100 million in grant funding to close to 500 projects. In the second round, we awarded over S$200 million in committed funding to more than 1,000 projects,” Wong said. The scheme has helped to anchor new digital asset ecosystem players, as well as catalysing the industry’s efforts to adopt ground-breaking technologies. MAS will provide a third tranche of funding to FSTI, with a new commitment of S$150 million for the next three years, maintaining focus on key areas of finance, such as AI, analytics, RegTech and cyber security. At the same time, there will be new focus areas, such as ESG fintech and Web 3.0.

Use of company checks must be eliminated by 2025

The share of checks as a share of payments by check, GIRO and FAST used to be 32% in 2016 and has fallen to 7% in 2021. Wong concluded that: “MAS will today hold a public hearing on several initiatives to eliminate all business checks by 2025. This will help reduce a significant portion of the check transaction volume in Singapore. However, among the remaining individual users of checks, we see that there are some, especially seniors, who are still not comfortable with the transition to e-banking and e-payments. We must not forget them. To ensure our e-payment journey is inclusive, we will offer a longer runway for individuals to switch to alternative payment methods.”