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Partakers in the Monetary Authority of Singapore’s (MAS) central bank digital currency (CBDC) competition have been commended for their efforts by the financial regulator in its recently published report on the challenge.
In November last year, the city-state of Singapore hosted its annual Fintech Festival and this featured a very topical competition: the Global CBDC Challenge, which MAS has now published a report on.
This was held in partnership with a variety of actors, including the International Monetary Fund (IMF) and the World Bank.
Launched over the summer, the competition was intended to look at three core issues: the CBDC instrument; its distribution; and infrastructure. It was supported by private sector partners, including Amazon Web Services, Mastercard and R3.
“We can only hope that central banks and private sector stakeholders will continue to push the boundaries with better solutions to address complex challenges in this field,” said Sopnendu Mohanty, chief fintech officer for MAS, who described the process as a “display of public-private partnership at its finest”.
Ultimately, the winners were ConsenSys, Criteo and Giesecke+Devrient, which had to go up in front of judges including the Bank for International Settlements’ Benoit Coeure, as well as central bank officials from Brazil, Indonesia and India.
ConsenSys’ CBDCgo provides integration and coexistence with existing systems, along with security and accessibility, while users could spend CBDCs without needing to change their payment or acceptance network.
Meanwhile, the Atomic CBDC solution, developed by Criteo in collaboration with Secretarium, is a digital currency platform safeguarded by hardware-based security.
This had a focus on anonymity and privacy for small transactions, while also offering traceability for large transactions for anti-money laundering and counter-terrorism financing purposes.
G+D Filia, which was created by Giesecke+Devrient, has been designed to be a financial inclusive payment product enabling participation in the digital economy without a smartphone or a bank account.
Those involved in the winning concepts have since spoken to VIXIO, and played up the opportunities for private sector collaboration in the CBDC race.
“We congratulate the winners of the challenge and the other finalists that soldiered on under tight timelines to develop the prototypes. We also commend the high quality of the submissions that we received for the competition,” said Mohanty.
The data
Within its new report, MAS has released various statistics that take into account the profile of the 15 participants that made it to the final of the competition.
Some 23 percent of the proposals indicated that their solutions were production-ready or already running live networks, while 27 percent stated that their solution was in proof of concept or pilot study.
In addition, one in four of the competition entrants had experience deploying CBDC-related solutions in production at a national level, while the majority of participants have vast experience with existing payment infrastructures.
Giesecke+Devrient, for example, is collaborating with Ghana’s central bank to pilot a CBDC.
Meanwhile, the rest of the proposals indicated that they were still in the ideation, development or prototyping stages.
Data also reveals that 50 percent of the submissions had diverse multi-disciplinary teams, such as ex-policymakers, legal, bankers and technologists. According to MAS, many of the teams had a deep understanding of CBDCs and the fundamentals behind the concept.
On the technology side, a significant number of proposals referenced blockchain heavily or were based on distributed ledger technologies (DLT), MAS observed. These included private permissioned blockchain, as well as private, permissionless chains.
Digital identity also played a big part in most of the proposals. Both hardware and software-based solutions were proposed, with hardware-based solutions in particular focusing on addressing financial inclusion.
