Yesterday, the Monetary Authority of Singapore (MAS) and the New York Innovation Center (NYIC), part of the New York Federal Reserve, announced joint experiments for cross-border CBDC, Project Cedar Phase II x Ubin+.

The project will explore the potential efficiencies of using wholesale central bank digital currencies (CBDCs) for cross-border payments.

In particular, it will investigate the reduction of settlement risk through the use of wholesale CBDC (wCBDC) as a settlement asset and the interoperability of two networks using different technologies.

“Experimentation in the central banking community is vital to realizing the full potential of digital assets and CBDCs in particular,” said Michelle Neal, director of the New York Federal Reserve Markets Group.

Last week, both central banks made separate announcements. NYIC shared the results of the first phase of the Cedar Project, which explored a wholesale CBDC for faster settlement. NYIC wanted to emphasize that this is just a technology research project. No decision has been made to issue a CBDC, nor does the technology suggest any potential directions.

And MAS introduced the Ubin+ Project, a three-pronged initiative to explore the use of wholesale CBDCs for cross-border payments.

Ubin+ also includes the Mariana Project to explore DeFi automated market making (AMM) for forex with the central banks of France and Switzerland. In other words, forex automation with smart contracts that can trade 24/7.

In addition, MAS participates in SWIFT’s trials for interoperability between DLT-based and non-DLT-based systems. And this latest project is part of its third strand to explore connectivity with other wholesale digital currency networks.

“The project takes a hands-on approach and designs for any future wholesale CBDC to be interoperable between networks while maintaining the autonomy of each network,” said Leong Sing Chiong, Deputy Managing Director (Markets and Development), MAS.