The Monetary Authority of Singapore (MAS) says that stablecoins have the potential to become a widely adopted means of payment.

In an interview with The Business Times, MAS managing director Chia Der Jiun says stablecoins have immense potential provided that regulations are in place to keep the crypto assets from straying from their linked value.

“Stablecoins have features that provide more value stability, with the potential to become a widely used payment instrument. MAS sees good potential in stablecoins provided they are well-regulated to have a high degree of value stability.

To this end, MAS finalized a regulatory approach for stablecoins, focusing on regulating the value stability risk of single-currency stablecoins.”

The MAS says it’s looking to establish a regulatory framework for stablecoins in an effort to protect users and consumers.

“We are working on the necessary legislative amendments to the PS (Payment Services) Act to implement the stablecoins framework. Only stablecoin issuers that fulfill all requirements under the framework can apply for their stablecoins to be regulated by MAS as ‘MAS-regulated stablecoins.’ This will allow the market to differentiate these stablecoins from other types that are not regulated for their value stability.”

The MAS also says that issuing a central bank digital currency (CBDC) – a stablecoin pegged to a nation’s currency issued by its reserve bank – is currently not needed at this time as cashless payments in the country are already efficient.

“MAS has assessed that the case for issuing a retail Singapore dollar CBDC in Singapore is not compelling at this juncture, as electronic payments in Singapore are quite pervasive, seamless and efficient.”

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The Philippine central bank has completed trials for a wholesale CBDC proof-of-concept designed to enable round-the-clock fund transfers among financial institutions.

The Bangko Sentral ng Pilipinas has concluded testing for Project Agila, a proof-of-concept for a wholesale central bank digital currency aimed at streamlining interbank payments, the central bank revealed in a press release on Thursday, Dec. 5.

The initiative allows financial institutions to transfer funds securely even during non-business hours, including evenings, weekends, and holidays, using distributed ledger technology hosted on Oracle Cloud Infrastructure, the press release reads.

The pilot tested various aspects of the system, including functionality, performance, security, and programmability, according to the BSP.

Unlike retail CBDCs meant for the public use, wholesale CBDCs are issued by central banks for use by commercial banks and financial institutions in high-value transactions, such as interbank payments, securities settlements, and cross-border transactions.

BSP Governor Eli M. Remolona, Jr. highlighted the potential benefits of wholesale CBDCs, stating they are expected to “enhance liquidity management, reduce settlement risks, and support financial stability.” Although the result of the pilot weren’t disclosed, Remolona added that insights from Project Agila would inform the central bank’s future CBDC roadmap, which seeks to leverage digital technologies to improve the efficiency and resilience of the national payment system.

Introduced in March 2022, Project Agila is designed to evaluate the potential of CBDC technology to improve the efficiency and reliability of the Philippines’ large-value payment system. Although the Bangko Sentral ng Pilipinas has not yet committed to adopting a CBDC, the initiative highlights its broader strategy to embrace emerging technologies, aiming to accelerate the digitization of the nation’s financial infrastructure.

The European Central Bank is urging faster action on the digital euro as legislative delays risk hindering progress amid growing global competition.

The digital euro project is facing delays in the European Union, with the European Central Bank urging faster action to prevent Europe from falling behind global competitors.

Evelien Witlox, the ECB’s project manager for the digital euro, told Euronews in an interview that Europe should speed up with the development to avoid falling behind, as global competitors like the U.K. and China are also exploring central bank digital currencies.

Thus far, there is no pan-European digital payment solution as 13 of the 20 countries in the eurozone lack a national card scheme, relying instead on international players like Visa and Mastercard, the report notes. Witlox noted that the European market remains fragmented, with “the ones that come closest to covering the whole of Europe are non-European.”

To address this, the ECB launched a CBDC exploration project in October 2021. However, before the digital euro can move forward, the European Parliament and Council must finalize the legal framework—a process that has yet to be completed nearly 17 months after the European Commission’s proposal. This delay has raised concerns within the ECB, Witlox noted.

Although discussions on the digital euro have made progress, Witlox reiterated the need for urgency to keep “sufficient pace in this process so that we can ensure that the digital euro will be there when we really need it.” Although there is no set timeline for the digital euro’s launch, Witlox remains optimistic, stressing that Europe is still “at the forefront of the development [of a CBDC].”