Opportune time for collaboration in blockchain technology between Andhra Pradesh and Singapore ….

As banks in India struggle with NPAs etc, other country banks are looking at opportunities here.

In this interesting speech, Ravi Menon of  Monetary Authority of Singapore pitches for collaboration between S’pore and Andhra Pradesh. More importantly, how banks of Singapore could provide blockchain technology solutions for the new AP State:

I am delighted to be here in Andhra Pradesh – the land of the Tiruppati temple, Carnatic music, Kuchipudi dance, and of course, the charming sea town of Vishakapatnam.  I am grateful to Chief Minister Chandrababu Naidu for his kind invitation to speak at this conference.

Andhra Pradesh and Singapore share in common a modern outlook. 

  • We both believe in the value of innovation for economic growth and harnessing the power of technology for the common good.
  • That Andhra Pradesh is organising a global conference on the topic of blockchains shows its progressive nature.
  • It is also a tribute to the vision of Chief Minister Chandrababu Naidu, who has inspired an IT revolution in Andhra Pradesh.

Little wonder that Andhra Pradesh and Singapore have forged good relations and have been working closely together.

  • The Andhra Pradesh government has appointed a Singapore consortium to develop the new capital city of Amaravati.
  • The Andhra Pradesh government and the Monetary Authority of Singapore (MAS) signed a FinTech cooperation agreement in October last year.
  • A delegation of more than 10 FinTech startups from Singapore attended the FinTech Valley Vizag Spring Conference in March this year.

He talks about blockchain tech and how it takes us from a centralised structure to a decentralised one. He points Singapore is open to using blockchain technology:

Project Ubin is a good example of such collaboration as well as challenging the status quo.

The problem statement is this: 

  • In a real-time gross settlement payment system, transactions typically go through a single trusted party, often the central bank.
  • The challenge MAS posed itself was: can we create a more efficient inter-bank payment and settlement system without MAS acting as the trusted party?

This began Project Ubin – a collaborative effort among MAS, the Singapore Exchange, ten banks, six technology companies, and six academic institutions. 

  • Over the course of the project, more than 150 people were trained in DLT.

Phase 1 of Project Ubin successfully demonstrated that banks are able to transact with one another on an Ethereum-based prototype without going through the MAS.

  • MAS issued a digital representation of the Singapore Dollar – a central bank digital currency – and placed it on the distributed ledger for domestic inter-bank settlement.

Phase 2 of Project Ubin – just recently concluded – successfully produced three software models that achieved decentralised netting of payments in a manner that preserved transactional privacy.

The next step in Project Ubin is to extend the application to cross-border payment and settlement. 

  • Cross-border payments today rely on a correspondent banking network. 
  • Banks hold balances with one another and settlement occurs through the adjustment of these relative balances.
  • There is counterparty risk, liquidity is split, and reconciliation is a major pain point.
  • In cases where multiple correspondent banks are involved, transactions may take days and at high cost to customers.

We are therefore exploring how Project Ubin can be linked up with other central bank DLT projects to facilitate cross-border payments.

  • If successful, it will help bring about significant improvements in efficiency, cost, speed, and risk management.
  • The grand vision is a DLT-based settlement system that paves the way for 24/7 operations and allows cross-border transactions to be settled instantly.

Fascinating. When most authorities are sweating over the blockchain tech and bitcoins, here is someone taking a different view.

In the end he pitches S’pore services to AP government issues:

DLT is a natural platform for collaboration.

  • With the strong trade flows between Singapore and India, there are good opportunities for FinTechs and financial institutions in Singapore and Andhra Pradesh to collaborate.
  • We can explore how our customs and trade platforms can be linked up to facilitate exchange of trade documents and advance the digitalisation of trade.
  • Our banks can work together on new models of cross-border payments to improve settlement time, allow for round the clock operations, and reduce settlement risk.

This is an opportune time for DLT collaboration, and more broadly FinTech collaboration, between Andhra Pradesh and Singapore.  I look forward to seeing FinTechs in Singapore developing solutions for use cases in Andhra Pradesh that will create value and opportunity for the people of this up-and-coming state.

Interesting space to watch out…

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3 Responses to “Opportune time for collaboration in blockchain technology between Andhra Pradesh and Singapore ….”

  1. vikramml Says:

    Similar and much earlier and much more laudable as it is in the private sector without govt involvement:
    https://www.coindesk.com/indias-axis-bank-launches-ripple-payments/

    As a rule of thumb, I prefer private sector innovation (unless we are talking about pure research labs, defence research, ISRO and IISC, multi-decade research, policy research, etc)

    It is also unpalatable for a govt to buy tech services from foreign vendors. We should see it as a sign of failure. Failure of education, domestic infra, failure of developing an environment where young people are inclined to pick up any tech and play with it and create something out of it for the local market, etc. Govt should limit itself to providing public goods and at most, in this context, funding research and then taking the output of these local research labs. It is a perverse kind of situation, a symptom that shows that new tech is alien and always has to be imported into India by govt patronage.

    Govts really ought to get out of any and all business and even the infinitely pathetic and bizarre promotion of so-called economic growth. They should focus of quality of life metrics instead. Economic growth does not require proactiveness or special effort by a govt entity. It is a natural state of affairs of a private sector which is not encumbered by govt restrictions.

    Govt effort of this nature does not lead to innovation, it leads to misappropriation of public funds and accrual of gains to some select few connected to the govt. The best we can hope for here is some positive second order effects. It is completely antithetical to the risk-taking nature of entrepreneurship and innovation. Govts need to ensure good delivery of public goods so that risk-taking ventures are possible by the young. One-off projects like this. always channeled thru govt need to be seen as symptoms of a broken system.

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    Opportune time for collaboration in blockchain technology between Andhra Pradesh and Singapore

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