The Monetary Authority of Singapore (MAS) has recognized Bitcoin and its blockchain technology as major trends affecting finance, and pledged $225 million to help develop the technologies behind these trends.
MAS Managing director Ravi Menon announced the Financial Sector Technology & Innovation initiative during a speech titled, “A Smart Financial Centre.” He expressed aspirations for the city-state to become a Smart Nation by leveraging the most influential FinTech developments.
When discussing the evolution of electronic money, he commented:
“In the 1990s, we thought that electronic money would replace cash and cheques. That has not happened. In most parts of the world, including the US, Japan, Europe, and Singapore, notes and coins in circulation outside banks has been increasing steadily every year. In 2000, some of us were quite sure that Internet-only banks would eventually replace brick-and-mortar branches. This too has not happened.”
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However, he said, “there is reason to believe that this time is different: that technology will indeed transform financial services in a way that has not happened before.”
He went on to describe to importance of mobility in financial services, before outlining six major trends transforming the world of finance: (1) mobile and digital payments, (2) authentication and biometrics, (3) blockchains and distributed ledgers, (4) cloud computing, (5) big data and (6) learning machines.
He outlined the benefits of Bitcoin’s ledger system: faster and more efficient processing, lower cost of operation and greater resilience against system failure.
He also commented on other systems such as Ripple, which “offers a solution, based on distributed ledgers, for real-time gross settlement, currency exchange, and remittance.”
Distributed ledgers can have practical use in non-financial applications, he pointed out, naming Factom’s land registry project in Honduras as an example.