- Telecommunications Giant Vodafone Leaves the Libra Association
- Group of Central Banks Assesses Developing Central Bank Digital Currencies
- South Korea Might Impose 20 Percent Tax on Cryptocurrency Profits
- Report: Terrorists Increasingly Use Crypto to Raise Funds Anonymously
- Canadian Securities Administrators Subject Crypto Exchanges to Securities Laws
Canada and Singapore Pilot a Cross-Border Payment System Based on Distributed Ledger Technology

The Bank of Canada and the Monetary Authority of Singapore have joined hands on performing a successful experiment related to cross-border payments, making use of central bank digital currencies.
In the first of its kind trial, the aim was to pave the way for a revolutionary breakthrough in cross country and cross currency payments, increasing their overall efficiency and reducing the risks associated with such a kind of payment. This comes as a long awaited solution. It remains to be seen how fast this technology can be integrated so that the existing system with its many flaws, can be avoided.
Existing methods of cross border payment are a slow, risky affair, with undue amount of faith being placed on a correspondent banking network. These networks are victims to high risks, such as counterparty risk, inefficient liquidity management, and hefty process of reconciliation, making it an overall uncomfortable process.
These latest trials have given a fresh wave of hope, using distributed ledger technology, and central bank digital currencies. This is aimed at making the process faster, safer and risk free, which would be a huge relief. This is why the trials by Bank of Canada and the Monetary Authority of Singapore deserves mention.
What is a Distributed Ledger Technology?
Distributed ledger technology is a form of decentralized Ledger, with digital copies stored, shared and in sync, with multiple sites, institutions or geographies.
While it is not exactly the same as blockchain that everyone is familiar with, blockchain does, however, lie at the roots of a distributed ledger technology. This comes with digital signature for identity, and linked records for continuity and data checking.
What does the new trial do?
Both Canada and Singapore have their pet projects as far as domestic payments are concerned, namely Project Jasper, and Project Ubin. These are successes in their domain.
The latest trial sees a collaboration of these two projects which are based on two distributed ledger technology systems. “Hashed Time Locked Contracts” are used to carry out a Payment versus Payment, without the presence of a trusted third party.
This process was aided by JPMorgan and Accenture, which support the Canadian network, and Quorum based Singapore network. For those interested in further details, “Jasper-Ubin Design Paper: Enabling Cross-Border High Value Transfer Using Distributed Ledger Technologies”, published jointly by Bank of Canada and Monetary Authority of Singapore provides more comprehensive details pertaining to the successful trial.
Reactions so far
There is much scope for development as far as this new technology is concerned. Development opportunities are popping up in the fields of alternate models pertaining to network structure, security and other research. This might be an opportunity many banks and fintech firms see and consequently wish to seize, and help out in making this new tech a worldwide success.
Scott Hendry, Bank of Canada Senior Special Director, Financial Technology, has stated:
“The world of cross-border payments is complicated and expensive: our exploratory journey into the use of DLT to try to reduce some of the costs and improve traceability of these payments has yielded many lessons.
The importance of international cooperation through projects such as this one cannot be underestimated. Only through continued collaboration and fundamental research will it be possible for this technology to mature and for policy-makers to fully understand its potential.”
What remains as a big question is whether or not this test run would be enough to push the rest of the world to make this bold move. Integration of DLt would require time and effort, and international cooperation. If all works well, this could be a path breaking revolution towards cross border payment, and may, in fact, be the next giant leap for mankind.