Easing the payment process was a key theme explored during the Singapore Fintech Festival 2023. To this end, the Monetary Authority of Singapore (MAS) unveiled two new cross-border systems in partnership with Malaysia and Indonesia respectively. 

Singaporeans can now use PayNow to send money to Malaysia with no additional apps or sign-ups required. On holidays to Indonesia, they’ll find merchants using QRIS and NETS QR codes, which can be scanned using their existing banking apps. This will reduce the need to convert and carry foreign currency. 

The same applies for Malaysians sending money to Singapore, and Indonesians making payments while visiting the country. All in all, these partnerships are a significant milestone in enabling seamless finance across Southeast Asia. 

Alongside the MAS, private companies are also doing their part to aid this mission. Global Payments Inc. has partnered with Visa to launch its Mobile Tap payment solution in Singapore. This service aims to empower merchants to accept payments using only their smartphones. 

The need for Mobile Tap payments

As Singapore moves towards a cashless society, merchants have no choice but to adopt new means of payment. This is necessary to compete and reach a wider audience. 

So far, QR codes have been a popular choice, often used by small businesses such as hawker centre stalls. While this is convenient for many local customers–who can scan the codes and pay using digital wallets such as GrabPay or services like PayAnyone–it’s not an ideal solution for everyone. 

Currently, SGQR codes – Singapore’s standardised QR codes for e-payments – are only supported by a limited selection of global banks and digital payment apps. Tourists–especially those from outside Asia–may have trouble scanning these codes using their usual banking apps. They would have to rely on cash when shopping at small merchants. 

Apart from this, QR codes may also prevent customers from receiving the perks of credit card transactions, such as airline miles and cashback rewards. When scanning QR codes with services such as Google Pay or PayAnyone, money is transferred directly from a customer’s bank account–it’s not possible to charge purchases to a credit card. 

With these reasons in mind, the appeal of Mobile Tap payments becomes apparent. This solution allows merchants to accept card payments using only their smartphones.

“With Mobile Tap, merchants are using their own smartphone as hardware. As such, POS (point-of-sale) terminal rental fees are not levied,” says a Global Payments representative.

Are Mobile Tap payments safe?

One of the concerns surrounding Mobile Tap payments might be that of security – what if the smartphone receiving payments is infected with malware or programmed to store payment information? 

As per Global Payments, this is not a problem to be worried about.

“No matter if it’s Mobile Tap or POS terminals, all payment solutions available for merchants and cardholders are required to attain certification issued by PCI-DSS (Payment Card Industry Data Security Standard). This is the highest level of standard globally recognised by international card schemes associations,” a Global Payments representative explains. 

Mobile Tap systems feature a certified ​​security protocol for contactless payment acceptance. All sensitive card data and personal information is encrypted and secure from potential malware attacks. 

Generally speaking, contactless payments are known to be more secure than other forms of transaction. They aren’t susceptible to traditional card skimming techniques, which consumers must be wary of when using card readers. 

Building a cashless society

Solutions such as Mobile Tap are paving the way towards a fully cashless society. In doing so, they’re overcoming hurdles such as cost and inconvenience, which have plagued this vision in the past. 

One of the key advantages of Mobile Tap – beyond the reduced expenses – is mobility. In crowded settings such as restaurants, merchants can easily collect payments at the table without having to retrieve a POS device. This process also improves the customer experience, as diners no longer have to hand over their credit card or wait in line at a designated payment counter. 

While smartphone payment acceptance is not an entirely new idea, this is its most user-friendly iteration yet. “Earlier, merchants had to carry an extra hardware device and connect it to their smartphones through Bluetooth or cables. Now, by adopting the built-in NFC technology, [smartphones can be used to accept payments] without the hassle of device-pairing connections.” 

With solutions like these, Singapore is well-positioned for the global shift towards digital payments. Ever since the pandemic – which accelerated the development of cashless payments – these transactions have become more and more commonplace.

As per a report by Global Data, cards accounted for a 50 per cent share of the country’s transaction volume in 2023. “The government’s push for a cashless society, the growing digitalization of banking services, and the increased convenience of contactless technology have supported the growth of card-based transactions.” 

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Featured Image Credit: Global Payments

Also Read: The future of digital money: Singapore sets the standard for stablecoin adoption

The net zero mission is all about sustainability, from how energy is generated to the manner in which it is stored.

As per the International Energy Agency, the world is set to add as much renewable power in the five years starting 2023 as it did in the 20 years prior. Renewable energy adoption is surpassing forecasts and more so than ever, there’s a need for solutions to store this energy sustainably. 

Currently, lithium-ion batteries are the most popular form of energy storage. They are used in all sorts of devices including phones, laptops, and electric vehicles (EVs).

Unfortunately, these batteries leave much to be desired when it comes to the efficient use of energy. They need to be replaced fairly often and lose capacity over time — you might have noticed that your electronics run out of battery quicker after a few years of use. 

In contrast, vanadium flow batteries are an emerging technology which can last a lot longer, up to 25 years, without degradation. Most of the components of vanadium flow batteries can also be recycled and reused.

Making energy storage sustainable

Founded in 2018, VFlowTech is a Singapore-based startup working on the development of vanadium flow technology.

“Although the origins of vanadium flow batteries date back to the 1980s, they encountered challenges such as parasitic losses,” says Dr. Avishek Kumar, CEO of VFlowTech. These challenges limit the efficiency and usability of these batteries.

“To combat such issues, VFlowTech embarked on a mission to redefine this technology, with a clear vision of developing the most competitively priced and scalable vanadium flow batteries globally.”

The company is making strides in improving the performance and sustainability of these batteries, all of which will prove integral if vanadium flow is to become the future of energy storage. 

“Our commitment to safety and environmental friendliness positions our battery technology as a sustainable choice for long-duration energy storage,” Dr. Kumar explains. 

Over time, vanadium flow batteries could benefit a variety of industries, powering grid services, EV chargers, and telecom towers. In line with Singapore’s net zero vision, VFlowTech envisions 30 per cent of the country’s energy needs being powered by vanadium flow batteries by 2050. 

Challenges to vanadium flow adoption

Although vanadium flow batteries offer a number of benefits — beyond the long lifespan, they also have low maintenance requirements and minimise energy loss — there are challenges in scaling up and making them mainstream.

“The upfront expense presents a significant barrier to adoption, particularly for businesses and industries operating within tight budgets,” Dr. Kumar says. The being said, he clarifies that “the total cost of ownership over the lifespan of vanadium flow batteries often proves to be cost-effective”. 

In industries such as automotives, there are a number of operational considerations which also stand in the way of using vanadium flow batteries. “It would necessitate substantial research and development efforts, adjustments in manufacturing processes, and potential updates to infrastructure for charging and maintenance.”

There is also a need to raise awareness about the benefits of vanadium flow batteries. “They are not as widely recognised or understood as more conventional energy storage solutions, such as lithium-ion batteries.”

Dr. Kumar believes that this requires constant engagement with industry stakeholders, policymakers, and the public. Educational efforts will play a key role in accelerating the adoption of this technology. 

Successes so far

To date, VFlowTech has launched a number of real-world solutions demonstrating the use of vanadium flow batteries. In Pulau Ubin, the company has deployed its 1MWh long-duration energy storage system, helping eliminate the use of diesel generators on the island.  

“This is a significant testament that vanadium flow batteries are capable of powering small communities, and we believe that by scaling this technology, we are able to power larger communities and islands like Singapore.”

Beyond Singapore, the company is also involved in rural electrification projects in India and parts of Africa. These involve the storage of solar and wind-generated power in VFlowTech PowerCube units. “Furthermore, our batteries have also been distributed in Japan to help act as a reliable energy backup resource during natural disasters,” Dr. Kumar adds. 

VFlowTech is also making headways in the EV sector, starting with EV chargers powered by vanadium flow batteries. “We are addressing the core of the EV ecosystem, aiming to clean the power source of EVs right from the roots.” 

Chargers offer an ideal way to get a foot in the industry as using vanadium batteries to power the vehicles themselves poses a bigger hurdle. “Because of their low power density, vanadium flow batteries are too large for vehicle application. The primary hurdle lies in reimagining vehicles with flow battery systems instead of the traditional lithium-ion batteries.”

Proving the utility of these batteries through EV chargers could serve as valuable evidence and help convince EV makers to design vehicles using this technology as well. 

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Embark on your startup journey with MAS-regulated ANEXT Bank, one of Singapore’s first digital banks for SMEs.

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Featured Image Credit: NTU / VFlowTech

Also Read: This S’pore startup is transforming the construction and landscaping sectors with clean energy

Singapore doesn’t look too favourably upon cryptocurrencies, but it’s still paving the way for the adoption of digital assets.

When it comes to cross-border transfers and a more efficient banking system, the Monetary Authority of Singapore (MAS) is placing its faith in stablecoins, CBDCs, and tokenised bank liabilities rather than Bitcoin and Ethereum.

As MAS’ Managing Director Ravi Menon explained at the Singapore Fintech Festival 2023, cryptocurrencies have failed the test of digital money, but these other asset classes could prove suitable given the right infrastructure and regulations.

Earlier in August, the MAS announced a regulatory framework addressing the value stability of stablecoins. This issue has taken the spotlight a number of times over the years, ever since the emergence of coins such as USDC and USDT, which are meant to be pegged to the US dollar. 

In 2021, Tether – the company behind USDT – was fined millions of dollars for false claims that its stablecoin was fully backed by fiat currencies. Tether misled consumers into believing that the amount of USDT issued was equivalent to the amount of US dollars which the company held. This would ensure liquidity and allow USDT to be swapped at a rate of US$1 at any given time. 

In reality, the Commodity Futures Trading Commission (CFTC) found that Tether held sufficient reserves for less than 30 per cent of the days between 2016 and 2018. Since then, the integrity of stablecoins and the transparency surrounding their reserves has come under scrutiny. 

Singapore’s solution for stablecoins

The MAS’ regulatory framework for stablecoins specifies a set of requirements, which issuers of stablecoins must meet. This includes criteria around the minimum reserves, which must be held and disclosures that must be provided to holders.

Issuers also have to ensure that their stablecoin can be exchanged for the underlying fiat currency within five days of a request being issued. 

As it stands, StraitsX and Paxos have received in-principle approval to issue MAS-regulated stablecoins. For StraitsX, this includes XSGD, a Singapore dollar-backed stablecoin which was first issued in 2020. It also includes the US-dollar-backed XUSD stablecoin which is due to be launched in the near future.

Meanwhile, Paxos is set to issue a new US dollar-backed stablecoin as well, in partnership with enterprise clients in Singapore. 

Regulation will absolutely play a key role in shaping the development of the stablecoin market. Countries such as Singapore and Japan have recognised that stablecoins can play a foundational role in the digital asset and broader Web3 ecosystem. Their policy frameworks are aimed at creating space for high-quality stablecoins to take root.

– Chengyi Ong, Head of APAC Policy, Chainalysis  

With its regulations, the MAS could help provide stablecoins with the legitimacy needed for them to take on the role of digital money. Investors would have the reassurance that coins such as XSGD and XUSD are just as safe to hold as their fiat counterparts. 

Growing demand for stablecoins

As the demand for crypto assets begins to rise yet again – with Bitcoin fund inflows surpassing US$1.5 billion this year – stablecoins are picking up right where they left off.

“Stablecoins are the backbone of the crypto economy. They are the most widely-used type of crypto asset,” explains Chengyi Ong, Chainalysis’ Head of APAC Policy.

According to Chainalysis data, more than half of all on-chain transaction volume to or from centralised services between July 2022 and June 2023 took place in stablecoins. “Growth in stablecoins will support broader crypto activity, and vice versa.”

Stronger regulations will contribute to this growth, inviting institutional participation and facilitating the use of stablecoins in a wider variety of transactions. 

“Transactions involving USD-backed stablecoins reached nearly US$6.87 trillion in 2022, surpassing the volumes of Mastercard and PayPal,” Ong says. “If institutional and retail adoption continues, we could continue to see stablecoins accounting for a larger share of on-chain value transfer.”

Stablecoins backed by commodities

Currently, MAS’ stablecoin regulations only address single-currency stablecoins (SCSes). These refer to stablecoins which have values pegged to a fiat currency such as the Singapore dollar or US dollar. 

SCSes are the most commonly used stablecoins today, however, there are other forms which have emerged in recent years as well. This includes stablecoins pegged to precious metals such as gold and silver. 

For example, each of Paxos’ PAXG tokens represent one fine troy ounce of gold stored securely in a vault in London. This offers a convenient way to invest in gold as there are no storage fees, the minimum purchase amount is extremely low, and transactions are settled almost instantly. 

Commodity-backed stablecoins could help make traditional assets more accessible and ease the investing process.

“These tokens represent a much smaller market share today. Whether they grow in popularity will depend on the value they provide to end-users, as well as the regulatory frameworks that will be established around them,” Ong explains. 

Featured Image Credit: Composite Ledger Insights, elements 123rf

Also Read: “Cryptocurrencies have failed the test of digital money”: MAS’ MD Ravi Menon on the future of fintech

In 2004, the United Nations (UN) published a report advocating for businesses and stakeholders to pay closer attention to environmental, social, and corporate governance (ESG). It recommended actions such as implementing ESG principles and factoring them in when making investments. The ultimate goal was to facilitate sustainable development and more resilient financial markets. 

In the years since, ESG has grown significantly with a number of countries introducing mandatory ESG reporting standards. For companies listed on the Singapore Exchange, sustainability reporting is required on a ‘comply or explain’ basis. Reports must include information such as sustainability policies and targets, relevant ESG factors, and climate-related disclosures. 

Starting 2024, these rules will become stricter for companies in a number of industries – such as finance and transportation – ensuring that they report climate-related risks and opportunities, without exception. This information can prove valuable to investors, lenders, and other stakeholders. 

For example, an ESG report could reveal whether a company is at risk of facing regulatory challenges. As governments around the world push for a green transition, sustainability guidelines are gradually being codified into rules and policies. Companies which don’t adequately prepare for these changes risk being left behind when they take effect.

Making ESG reporting simpler

While its benefits are apparent, ESG reporting is no simple task. Especially for small businesses, the cost of collecting and analysing data is a significant hurdle.

Beyond this, data accuracy is another pain point. Unlike financial reports where information can be easily quantified, ESG reporting relies on estimates and subjective evaluation. 

As such, in Singapore’s efforts to improve sustainability reporting, these factors must be kept in mind. Companies need support to comply with reporting requirements while running their day-to-day operations. 

At the Singapore Fintech Festival 2023, the Monetary Authority of Singapore (MAS) unveiled Gprnt.ai (pronounced ‘greenprint’), a platform designed for seamless ESG data collection and access. Using AI technology, Gprnt aims to help companies – both small and large enterprises – automate their ESG reporting process. 

It was a combination of tech providers, global banking [companies], and regulators, invited to come together and find a comprehensive way to create a platform where everybody would be able to disclose [ESG] data in the most elegant and frictionless way.

– Sopnendu Mohanty, Chief FinTech Officer, MAS

Microsoft, HSBC, KPMG in Singapore, MUFG Banks, and MAS are all strategic partners in this project, supporting the commercialisation of Gprnt. 

The need for standardisation

Gprnt seeks to address a variety of issues which stand in the way of effective sustainability reporting. Among these is the need to standardise the data and metrics used by companies as part of their reporting process. 

“Currently, the data sources are very disparate,” explains Sunil Veetil, HSBC’s Regional Head of Commercial Banking Sustainability. There aren’t established proxies to stand in where there’s a lack of data either. “And if you use inconsistent proxies, obviously, the end results will be very different.” 

This makes it difficult for banks to provide loans or gauge customers’ credit scores based on existing methods of ESG reporting. For banks such as HSBC, it’ll prove useful if businesses begin using a common platform such as Gprnt for reporting. “This is what we’d like to focus on across the region.”

Banks and investors will be able to make more informed decisions when provided with high-quality data. This will enable money to flow into truly sustainable companies and away from greenwashing projects which have become prevalent in recent years.

For businesses, Gprnt will provide access to data from trusted providers and allow them to select from a curated set of global ESG standards. A dedicated AI tool will help identify ESG risks and areas of improvement as well. This service could help reduce the traditional costs associated with ESG reporting – a key factor to help ensure that small enterprises can keep up with regulatory requirements. 

The future of ESG in Singapore

With Microsoft as a technology partner for Gprnt, Mohanty expresses hope that the reporting process will become as simple as the click of a button. “I think [there should be] a single button. You press it, the data gets collected and passed on to Gprnt, the report gets generated, and you take it to the bank to get credit.” 

In reality, there are likely to be a ‘few buttons’ involved but the idea remains the same – breaking down the barriers to ESG reporting. 

Earlier in November, MAS also announced that Gprnt had entered into a collaboration with Singapore Manufacturing Federation (SMF), an organisation representing around 5,000 corporate members.  

“This collaboration signifies a major stride in our ongoing efforts to support the sustainability journeys of our 5,000 member companies,” says SMF President Lennon Tan. By integrating Gprnt into its initiatives, SMF will enable efficient capture and sectoral aggregation of ESG data. 

“This advancement greatly simplifies the ESG reporting process, especially for small and medium enterprises,” he concludes. 

Featured Image Credit: MAS

Also Read: More merchants are now accepting Alipay+ in S’pore – here’s a look at what it’s about

Singapore’s growth as a fintech hub has drawn the attention of Ant Group, the operators of the world’s largest mobile payment platform, AliPay. The platform features over 1.3 billion users and boasts a controlling share in China’s mobile payments market. 

Earlier in September, Ant Group opened a new office in Singapore, which will now serve as the headquarters for its international unit. Accompanying the launch, the company is rolling out an expansion strategy with an aim to help global merchants engage digitally with customers in Asia and beyond. 

Commenting on the reasons why Singapore was chosen as the expansion hub, Ant Group CEO Eric Jing mentions the timezone proximity and the company’s pre-existing teams in the country. 

“We are seeing the rising adoption of digital technology in ASEAN countries and that presents huge potential. [There’s also a] favourable and transparent policy environment which is very critical. So that’s a couple of reasons,” Jing adds.

As part of Ant Group’s expansion, the company has also joined hands with the Monetary Authority of Singapore (MAS) under the Project Guardian umbrella and is testing a treasury management solution. This will enable real-time multi-currency clearance and settling using tokenised deposits.

At the Singapore Fintech Festival 2023, Jing sat down with MAS’ Chief Fintech Officer Sopnendu Mohanty to discuss the growth of AliPay and the prospect of going global.

Revolutionising payments in China

Established in 2004, AliPay played a significant role in China’s digital payments revolution. It propelled the use of QR codes in the country, which have since become the most popular form of mobile payment.

“We were looking at two options: barcodes or QR codes,” recalls Jing. This was back in 2011 when the company first began making headways in digital payments. 

At the time, the standard in developed countries was credit cards and point-of-sale systems. For China, however, this wouldn’t be an ideal solution. Getting the entire country to shift to such a system would entail a long and expensive process.

As such, Ant Group recognised an opportunity to facilitate payments through mobile phones — a simpler and cheaper alternative given that smartphone adoption in China was already on the rise. “We could make [payments] very easy for small vendors, mom-and-pop shops, everyone,” Jing says. 

The company decided to opt for QR codes as they can store more information than barcodes and are easier to scan. Since then, merchants have been able to easily accept cashless payments in China. It simply involves generating a QR code using Alipay and putting it up for customers to scan. 

Solving global problems

Looking beyond China today, Ant Group is exploring the use of new technologies to drive financial innovation. “Everyone’s talking about AI, [distributed ledger technology], and blockchain. [We’re always trying to figure out] how to use technology to make big changes,” Jing says. 

Ant Group has taken a particular interest in developing privacy-preserving computing. This involves allowing data to be processed while preserving its confidentiality. For example, an internet user might want to find out about restaurants near them without giving a search engine free access to their location details.

Privacy-preserving computing would make this possible. Search engines would be able to process location-based data, however, they wouldn’t have access to sell it or use it for other purposes. 

Jing mentions that Ant Group has been looking into bringing down the cost of privacy-preserving computing closer to that of normal computing. This would have great implications on the future of privacy in the digital world. 

As AI technology broadens the capabilities of data analytics, the value and usefulness of data is expanding with it. Companies have a lot to gain from data collection, whether it’s for targeted advertising, UX development, or customer retention. With this in mind, bad actors might also be incentivised to steal and sell data, more so than ever before. 

Privacy-preserving computing would help users enjoy the benefits of AI analytics and big data while curbing the associated security risks. 

Lessons for startups

Finally, Jing moves on to shed some light into the work culture that has allowed Ant Group to prosper so far. “We’re always trying to create an environment where everyone is equal and everyone can inspire others,” he says.

With that in mind, he acknowledges that there’s still a need for leaders to filter through the noise and make the tough decisions. “After listening to many different voices and brainstorming, at the end of the day, you have to make a decision.” 

The goal isn’t to make a decision which satisfies everyone, only to ensure that it is sufficiently informed and takes multiple viewpoints into account. 

For startups making their way up the ranks today, Jing believes that purpose should be the central driving factor. “What’s the problem you are going to solve?” — that’s the main question Jing would like answered from any startup pitching to him.  

Along with this, Jing also gives value to the energy and character of the startup founder. “[It’s important to] consider whether we are complementary, [such that] by working together we can really make things happen.” 

Featured Image Credit: Singapore Fintech Festival 2023

Also Read: More merchants are now accepting Alipay+ in S’pore – here’s a look at what it’s about

Ever since the pandemic, the demand for digital payments has grown rapidly. Initially, this was spurred by physical distancing rules, which contributed to the growth of online shopping and cashless payments. Since then, however, consumers and merchants alike have grown used to these new means of transaction.

Southeast Asia, in particular, is leading the way for financial digitisation. As it stands, more than 70 per cent of adults in SEA are currently ‘unbanked’ or ‘underbanked’, and digital payments are primed to address the issue of financial inclusion across the region. 

SEA’s digital payment market is projected to grow by over 14 per cent annually from 2023 to 2027. In line with this trend, SEA has also become the world’s fastest-growing region for mobile wallets.  

The mission for digital finance is being powered by both private institutions and governments. At the Singapore Fintech Festival (SFF) 2023, the Monetary Authority of Singapore (MAS) announced the launch of new cross-border payment systems, allowing seamless transfers between Singapore and Malaysia, and Singapore and Indonesia. 

Instant fund transfer between Singapore and Malaysia

Since 2017, Singaporeans have enjoyed the convenience of instant fund transfer through the PayNow service. This requires only the recipient’s phone number and can be used to transfer funds to customers of seven different participating banks. 

As of this November, PayNow users will enjoy the same convenience when transferring funds to Malaysia as well. This has been made possible by linking PayNow with DuitNow – a similar payments system which was launched in Malaysia in 2018. 

This service will be launched in phases to customers of Liquid Group, Maybank Singapore, OCBC, and UOB in Singapore. These institutions will gradually increase the eligible users until the end of January 2024.

In Malaysia, the service will first be available to customers of CIMB, Maybank, and TNG Digital. There are also plans to onboard more financial institutions after this launch period. 

The PayNow-DuitNow linkage is the culmination of a shared aspiration by Singapore and Malaysia to facilitate cross-border payments between the two countries. This linkage represents another step towards ASEAN’s vision for regional payments interconnectivity.

– Ravi Menon, Managing Director, MAS

Users will be able to send or receive up to S$1,000 on a daily basis using this real-time payments system.

Besides being neighbours, Singapore and Malaysia are among each other’s largest trade partners. As Ghaffour mentioned in his remarks at the launch, Singaporeans used to visit Malaysia twice-a-year on average prior to the pandemic. 

With borders open again and travel picking up, this payments system will play a key role in strengthening ties between the two countries. For individuals and enterprises alike, the barriers for remittance and payments are now lower than they have ever been. 

Cross-border QR payments between Singapore and Indonesia

QR payments have become a popular way for merchants – especially small businesses – to go digital and join the cashless revolution. Unlike card-based systems, they don’t require an investment in a point-of-sale terminal (POS), nor do they come with high transaction costs. This convenience extends to consumers too, who can pay using just the banking app on their smartphone. 

At SFF 2023, the MAS and Bank Indonesia (BI) launched cross-border QR payment linkage between Indonesia and Singapore. Going forward, the millions of visitors who travel from Singapore to Indonesia – and vice versa – each year, will be able to make QR payments across borders as well. 

This initiative reduces the need for currency conversion and makes the payment process a lot simpler. For merchants, a larger customer base can now purchase their products and services using existing QRIS and NETS QR codes. 

The QRIS-NETS QR payment linkage will promote cross-border e-commerce activities and tourism spending across Singapore and Indonesia, by individuals and small businesses.

– Ravi Menon, Managing Director, MAS

Along with this launch, MAS and BI have also signed a letter of intent to establish a local currency settlement framework, which will come into effect in 2024. “This will complement this payment linkage by facilitating the use of Indonesia Rupiah and Singapore Dollar for the settlement of cross-border payments,” says Menon.

As a result, businesses will be able to reduce their exposure to exchange rate fluctuations and risks. 

In his remarks at the launch ceremony, BI Governor Perry Warjiyo stressed the importance of collaboration in improving payment connectivity across SEA. This particular project was implemented successfully through the efforts of not only BI and MAS, but the Indonesian Payment System Association (ASPI), RAJA (Rintis, Artajasa, Jalin, and Alto), Network for Electronic Transfers (NETS) and participating financial institutions.  

“These initiatives mark another milestone for Singapore’s growing cross-border payments linkages with key regional economies,” Menon concluded.

Featured Image Credit: Singapore Fintech Festival 2023

Also Read: “Cryptocurrencies have failed the test of digital money”: MAS’ MD Ravi Menon on the future of fintech

Earlier in September, Ravi Menon, the Managing Director (MD) of the Monetary Authority of Singapore (MAS), announced his intention to retire at the end of 2023. This will mark the end of a 13-year-long tenure, making Menon the longest-serving chief which the MAS has seen to date. 

During his time as MD, Menon has led Singapore’s development as a fintech hub. This mission started back in 2015 with the Financial Sector Technology and Innovation Scheme (FSTI), which saw S$225 million committed to the development of the country’s financial ecosystem. In 2020, another S$250 million was dedicated to the scheme to support technological innovation in finance. 

As a result of these efforts, Singapore has gone from harbouring only 50 fintech firms in 2015 to over 1,000 today. The fintech market is growing rapidly in the country, with funding reaching an all-time high of US$4.1 billion in 2022.

At the Singapore Fintech Festival 2023 (SFF 2023) today, Menon spoke to MAS’ Chief FinTech Officer Sopnendu Mohanty and DBS’ Managing Director Tan Su Shan about some of the key takeaways from his time leading the MAS. 

The spark which ignited fintech in Singapore

Menon reflects on 2015 as a time when there was a noticeable shift in perception towards technological innovation and the impact it’d have on the world going forward. 

“Many technologies were coming together in a certain fashion. We just had this instinct that tech was going to be important. It was going to be transformative in ways we did not [yet] understand,” Menon says. 

At this time, digital assets and blockchain technology were barely half a decade old. There was a strong need to explore and develop them further before their true value would become apparent. “By getting into it early, experimenting, and collaborating, we [felt that] we could take it somewhere. That’s how it started.” 

“Eight years ago, I had no clue what any of this was,” Menon continues. He highlights that innovation is a process of continuous learning and pivoting. 

“It’s not as if there is a very clear vision. The only mission was ‘let’s use technology to solve our problems’, ‘let’s use technology to create new opportunities’, ‘let’s use technology to improve people’s lives’.” 

This method of experimentation – which embraced uncertainty and constant change – allowed MAS to pioneer the development of digital asset use-cases through initiatives such as Project Guardian. As a result, Singapore is now primed to upgrade its financial infrastructure using tokenised assets and programmable money. 

A testament to strong leadership

Although Menon is quick to direct the credit to his team and Singapore’s broader fintech ecosystem, his leadership has played an integral role in realising Singapore’s fintech vision over the past decade. 

In light of this, Mohanty highlights a few of the qualities which have allowed Menon to be a successful leader. First up is his unique calm nature. “I’ve never seen him angry,” says Mohanty – a remarkable feat after eight years working together in a line of work that is known to be stressful.

Elaborating on this, Menon explains, “When people are doing their best and putting their heart and soul into [their work], it’s very hard to get angry.” He stresses a belief that everyone means well. When you start with that assumption and understand others’ point of view, it removes any basis for anger. 

Undoubtedly, this also has a lot to do with building a strong team – people who can be trusted to put their best foot forward. “One of the best decisions I made was hiring Sopnendu and building a team around him,” Menon says. 

He stresses that this can often be true for others leading teams and organisations as well. “Sometimes, the best decisions we make are [those concerning people] – who we put together, who we put in charge.”

Moving on, Mohanty focuses on a quality which he refers to as ‘super shock absorber’. In an industry which is never short of surprises, Menon has always been able to absorb and roll with whatever is thrown his way. 

“When they happen all the time, they don’t seem like shocks,” Menon explains. In the financial sector, that’s the nature of work. What’s important isn’t the shocks but the way you respond to them.”

“[It’s important to] have a sense of detachment,” Menon advises. “When everybody’s [panicking], be a witness and watch the scene. Take your mind away from the issue at hand. [That can help you] see much more clearly.” 

Menon acknowledges that this isn’t always easy to do, but stresses on how useful this can be. “Many of us get caught up and that’s where we get flustered. Whenever you withdraw yourself, it works.”

Finally, Mohanty recounts Menon’s ability to masterfully summarise and recount what others have said. Menon explains that this is a quality derived from respecting everyone’s views and trying to understand their unique perspectives. 

“Each perspective is valuable and the job of a leader is to see the connections and form a bigger picture.”

Featured Image Credit: Singapore Fintech Festival 2023

Also Read: “Cryptocurrencies have failed the test of digital money”: MAS’ MD Ravi Menon on the future of fintech

In recent years, digital money has made a strong case for its role in the future of finance. It comes with benefits such as seamless cross-border transactions, reduced costs, and ease of access to financial systems. However, digital money can take on a number of different forms and not all of them are made equal.

At the Singapore Fintech Festival 2023, Ravi Menon, the Managing Director of the Monetary Authority of Singapore (MAS), spoke about four “contenders” in the race to make digital money ubiquitous.

Starting off, Menon writes off privately-issued cryptocurrencies which have become popular speculative investments in the last decade. This includes crypto coins such as Bitcoin and Ethereum, which are being treated as stores of value by retail and even institutional investors today.

“Private cryptocurrencies have failed the test of digital money,” Menon says. “They have performed poorly as a medium of exchange or store of value. Their prices are subject to sharp speculative swings, and many investors in these cryptocurrencies have suffered significant losses.”

Next, there are tokenised bank liabilities and central bank digital currencies (CBDCs), both of which Menon believes can work hand-in-hand while playing the role of digital money. 

The future of digital money

Tokenised bank liabilities represent customers’ claims on a bank’s balance sheets. For example, a customer who has S$1,000 deposited at a bank would receive an equivalent amount of tokens to transact with. When a purchase is made, these tokens would be transferred to the merchant, who’d be able to claim them from their respective bank.

This is known as clearing, a process through which banks are informed of the amounts which their customers’ account needs to be credited or debited with. Traditionally, clearing houses would facilitate this process, acting as a mediator when transactions are made between banks. Tokenisation allows clearing to be automated, removing the need for middlemen and improving efficiency. 

After clearing comes the settlement process, which involves the physical movement of money between banks to fulfil their obligations to one another. This is where CBDCs come into play. 

As the name suggests, CBDCs refer to digital currencies issued by a country’s central bank. They enjoy the same level of stability as their fiat counterpart, while leveraging the benefits of blockchain technology. 

CBDCs can exist on the same infrastructure as tokenised bank liabilities, allowing the clearing and settlement process to be carried out simultaneously. 

“Since 2016, MAS has conducted many experiments with other central banks and the financial industry to explore the use of wholesale CBDCs to facilitate real-time cross border payments and settlements,” Menon explains. 

Next year, the MAS plans to take this a step forward, moving on from test environments and piloting the live issuance of wholesale CBDCs. Banks will be able to use these CBDCs for the real-time settlement of domestic payments. 

Outstanding interbank obligations arising from [transactions made using tokenised bank liabilities] will be settled via the automatic transfer of wholesale CBDCs that the banks are holding. So clearing and settlement will occur in a single step on the same infrastructure, unlike the current system in which clearing and settlement takes place on different systems and settlement occurs with a lag.

– Ravi Menon, Managing Director, MAS

What about stablecoins?

Menon refers to stablecoins as the fourth and final contender for digital money. “Stablecoins, if well-regulated, can potentially play a useful role as digital money alongside CBDCs and tokenised bank liabilities,” he says. 

Earlier this year, the MAS finalised a new regulatory framework governing stablecoins. This framework includes criteria – such as value stability and capital requirements – which issuers must fulfil for their stablecoins to be recognised as MAS-regulated. 

As the legislative amendments surrounding this framework will take at least a year to take effect, the MAS has taken an interim approach to recognise entities whose stablecoins already demonstrate compliance. Three companies have been granted in-principle approval under the Payments Services Act (PSA), including StraitsX which issues the Singapore-dollar-backed stablecoin XSGD.

“Once the legislative amendments take effect, these stablecoins will be regarded as MAS-regulated stablecoins and receive the credibility that goes with it,” Menon says. 

The MAS believes that well-regulated stablecoins could help spur innovative use-cases. “One example is Purpose Bound Money (PBM) showcased through Project Orchid.” 

PBM refers to a protocol which specifies the conditions under which an underlying digital currency can be used. As part of Project Orchid, StraitsX is trialling the use of XSGD to facilitate escrow arrangements in e-commerce transactions.

“This ensures that funds are released to merchants only when the customer receives the purchased items, providing greater assurance to both parties. This has been tested at the Singapore FinTech festival, in partnership with Amazon and Grab.”

Building digital infrastructure

Along with digital assets, there’s also a need to develop the underlying infrastructure – i.e. blockchains – which they operate on. Currently, public permissionless blockchains remain in the spotlight with significant investments being made to develop apps on chains such as Ethereum and Solana. 

Menon points out that such blockchains come with limitations which makes them unfit to serve as the basis for the global financial infrastructure. “Public blockchains suffer from a lack of accountability and normality of service providers,” he says. 

These problems are addressed by private blockchains such as Ripple, however, they suffer from a lack of interoperability instead. “This could potentially lead to fragmentation of liquidity in digital assets, which is what we’re trying to solve in the first place.”

The ideal solution, as per Menon, requires open and interoperable networks, which are also compliant with relevant regulatory requirements. In line with this vision, the MAS has teamed up with a group of industry players – BNY Mellon, JP Morgan, DBS and MUFG – to develop Global Layer One, an open, digital infrastructure to facilitate seamless cross-border transactions and enable tokenised assets to be traded across global liquidity pools. 

“MAS welcomes interested financial institutions, international policymakers, and others to join this initiative.”

Featured Image Credit: Singapore Fintech Festival 2023

Metaverses aren’t quite what they used to be in early 2022, at least not in the public eye. That was a time when it cost almost half-a-million dollars to be neighbours with Snoop Dogg in the virtual world of Sandbox. Today, the interest just isn’t there. 

The peak demand for Sandbox’s virtual land saw over US$30 million in daily transactions – a figure which has since come down to ~US$200,000. Facebook, which rebranded to Meta during this time, has lost US$46.5 billion on its metaverse division since 2019. 

While some have written the concept off as a fad, industry players say there’s more yet to come. At a tech conference earlier in July, Meta’s Vice President of Metaverse admitted that while the metaverse hype was dead, that wasn’t the reason why the company invested in the technology. It will remain a focus in the years to come. 

Marketers and creative studios have continued exploring metaverse campaigns this year. Leading data insights startup GEEIQ has overseen activations for companies including Gucci and Walmart on the Roblox metaverse.

Over on Decentraland, the Metaverse Fashion Week was held for a second year running, attracting attention from brands including Adidas and Tommy Hilfiger.

Alive in the east: Asia leads metaverse innovation

The metaverse has fallen off the media (and social media) cycle, but the technology is steadily integrating itself into people’s lives. This is especially true in Asia, a region which is expected to lead metaverse innovation in coming years. 

As The Sandbox co-founder Sebastien Borget noted in an interview with Coin Telegraph, “The metaverse might feel like it’s dead for users living in the United States, but the industry is thriving throughout Asia.”

Singapore is a prime example of this, with a number of companies and public institutions engaging their customers through metaverse applications. Changi Airport’s ChangiVerse – a Roblox-based metaverse featuring games and interactive experiences – has drawn in millions of users since its launch earlier this year. 

The metaverse is dead! Let's organize an online wake so that we 600,000,000 monthly active users in Fortnite, Minecraft, Roblox, PUBG Mobile, Sandbox, and VRChat can mourn its passing together in real-time 3D.https://t.co/tRpFHsdZLw

— Tim Sweeney (@TimSweeneyEpic) May 9, 2023

The banking industry has been unanimously accepting, with DBS leading the way last year and announcing a partnership with The Sandbox to create BetterWorld.

At the time, DBS Hong Kong CEO, Sebastian Paredes said, “We have been getting our feet wet in this space, and our very own young technologists have been given the freedom to develop experimental concepts in the metaverse.”

In August 2023, the company unveiled the results of its efforts – a gamified concept designed to raise awareness about sustainability, starting with the global food waste challenge. 

Metaverse as a force for good

“Rather than launching BetterWorld simply for the sake of entering the metaverse, as a purpose-driven bank, we saw an opportunity to tap the metaverse as a different way of engaging communities and businesses on pressing sustainability issues,” explains Karen Ngui, DBS’ Head of Group Strategic Marketing and Communications.

To date, most businesses have ventured into the metaverse with their core services in focus. For banks including HSBC, OCBC, and Standard Chartered, this has meant opening virtual branches. 

It is apparent though that the primary intention here is to use the metaverse as a marketing tool rather than a means to expand services. Virtual branches can’t be used to conduct transactions – they’re simply a way for banks to establish their presence in the metaverse, in preparation for future opportunities. 

“BetterWorld departs from the usual bank offerings such as a metaverse bank branch or a client lounge,” says Lam Chee Kin, DBS Legal and Compliance Group Head. This is an innovative approach which allows the company to stand apart while also keeping up with the playing field. 

DBS can use this initiative to familiarise itself with metaverse technology in a manner which, arguably, offers more value than a virtual bank branch would. For its debut, BetterWorld features a gamified adventure which highlights the efforts of five businesses – supported by the DBS Foundation – in addressing the challenge of food sustainability. 

The future of the metaverse

Looking forward, Chee Kin highlights three business models which DBS believes could succeed in the metaverse: Businesses which successfully incorporate the metaverse into existing business models in a way which drives competitive differentiation; businesses which successfully create or orchestrate new experiences in the metaverse; and businesses which provide the underlying components (the “picks and shovels”) of the metaverse.

He adds that the third category is where investments have continued to happen even as the metaverse hype has cooled down. The space has moved on from the “short-term monetisation gains” which big tech players initially sought and now it’s time to bring a “collective sense of meaning and responsibility” to the future iterations of the metaverse. 

All things considered, Chee Kin puts forth DBS’ view that metaverse technology is far from dead. “We think the metaverse is very likely – in Thanos’ words – inevitable because it speaks to something fundamental and innate in human psychology.”

“It provides an avenue for us to break away from the constraints defined by the physical world and to have experiences that would otherwise be impractical or impossible in the real world. The metaverse is so compelling because it offers humanity a promise of escapism, catharsis, progression and achievement, all with little or no physical risk.”

Featured Image Credit: DBS BetterWorld

In contrast to the start of the year, ChatGPT’s views on philosophy and geopolitics no longer dominate the news cycle. The hype around generative artificial intelligence (AI) has calmed down, and the world is better off for it. Pushing past the novelty, the real value-adds of AI technology – of which, there are more than a few – have now taken the spotlight. 

ChatGPT might not be sentient, but it is proving useful for a number of reasons, from proofreading emails to summarising financial reports. The platform experienced a slowdown in activity following its initial launch — however, as of August this year, monthly traffic was seen stabilising around 180 million unique users. 

OpenAI – the website which hosts ChatGPT – was the 22nd most visited website in the world this September, as per data by Similarweb. That places it above renowned platforms including Netflix, Pinterest, and Discord. 

Across social media and pop culture, AI-generated content has also become increasingly common. Creators have amassed millions of followers with pages that showcase AI-generated artwork, whether it’s portraits depicting humans or renders of surreal architecture.

This year also marked the first instance of an AI-generated song – mimicking the voices of popular artists Drake and The Weeknd – being submitted for the Grammy Awards. 

How fast will AI technology grow?

It’s apparent that AI is more than just a fad, but the full extent of its influence remains to be seen. Earlier this year, investors put forth a vote of blinding confidence during a tech rally which saw the Nasdaq 100 – a stock market index dominated heavily by tech companies – gain almost 40 per cent over six months. 

The biggest winner of this rally was Nvidia, a semiconductor company which has since become the world leader in AI computing. Nvidia’s stock is up over 180 per cent year to date, a move which has seen its market cap cross US$1 trillion and made it the sixth most valuable company in the world. 

This staggering valuation not only represents faith in the company, but faith in the future of AI technology. Analysts project Nvidia to grow earnings and revenue at a rate of 31 per cent a year, while the AI industry collectively is projected to grow at a rate as high as 42 per cent a year. 

Taking these projections into account, there’s a lot of room for companies to grow and provide value across the AI supply chain. Here’s what that could mean for business and the job market in Singapore. 

Singapore’s growth as a semiconductor hub

Companies can capitalise on the growth of AI in one of three ways: facilitating the use of the technology, using it to improve existing business models, or creating wholly new business models. 

In Singapore, the first of those categories takes the spotlight. The country is the world’s seventh-largest chip exporter and its semiconductor industry is primed to benefit from the demand for AI computing. 

Generative AI applications such as ChatGPT depend on AI chips for their computing power, and the production of these chips is already proving essential for the growth of AI technology. 

In an interview with CNBC last September, the executive director of Singapore Semiconductor Industry Association, stated that the country is well-positioned for the AI boom. Although the semiconductor industry took a hit post-pandemic, it is expected to recover by mid-2024 with AI-led demand contributing to further growth. 

This could contribute to an increase in jobs in Singapore. In 2022, Minister of State Alvin Tan said that the semiconductor industry could account for 2,000 more jobs in the next three to five years. Since then, the outlook has only gotten brighter. 

Singapore has emerged as an attractive destination for foreign companies to operate chip manufacturing plants.

In September 2023, GlobalFoundries, the world’s third-largest chipmaker, opened a US$4 billion chip manufacturing plant in Singapore. This plant alone is expected to generate 1,000 jobs by 2026.

In October 2023, Nikkei Asia reported that Vanguard International Semiconductor – an affiliate of Taiwan Semiconductor Manufacturing Co (TSMC) – is nearing a decision to build its most advanced chip plant ever in Singapore as well.

As per MyCareersFuture, engineering and technician roles are among those which could grow in demand along with Singapore’s semiconductor industry.

The impact of AI across industries

Moving onto the use of AI to improve and create business models, there are a number of trends accompanying the adoption of this technology. 

Singapore’s cybersecurity market – projected to grow at a compound annual rate between 10 and 15 per cent in coming years – is set for significant change as AI becomes more prominent. AI has broadened the horizons for scammers and hackers, and combating their attacks will require equally sophisticated solutions. 

Businesses across different industries – finance, healthcare, technology – will all need to up their cybersecurity investments in a bid to keep their data safe and secure. This could soon become an essential for any company storing information digitally or making use of AI tools as part of its operations. 

Shifting focus to the productive use of AI, the demand for AI skills is likely to rise in coming years. Already, job postings in Singapore have started looking favourably on those with knowledge of AI tools. For those entering the job market or looking to strengthen their resume, this could be a useful field to consider upskilling. 

All things considered, AI technology has moved on from being a novel trend and is now becoming a part of everyday life. For better or worse, individuals and companies must find ways to adopt and adapt to this new technology.

Featured Image Credit: Aranca

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