‘We Need New Form of Money’ Sopnendu Mohanty, Monetary Authority of Singapore at Global Fintech Fest 2022

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Speaking at Global Fintech Fest (GFF) 2022, at a fireside chat with Smita Aggarwal, Global Investments Advisor of Flourish Ventures, Mr. Sopnendu Mohanty, Chief Fintech Officer, Monetary Authority of Singapore, said, In the new architecture of Web 3.0, asset transfers are not only done traditionally, therefore we need a new form of money that transacts on a distributed ledger.

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Friday, September 23, 2022
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Professional Services, Finance, Department, CBDC, Item Unique Identification, UPI, Government of India, Ministry, Jio, UIDAI, Semantic Web, Payments Council, Ministry of Finance, Startup India, FCC, International Finance Corporation, Architecture, Monetary Authority of Singapore, IFC, Â, Tokenization, United Nations Capital Development Fund, GFF, Reserve Bank of India, PCI, Economy, Better Than Cash Alliance, International Financial Services Centre, National Investment and Infrastructure Fund, Federal Department of Economic Affairs, Education and Research, World Bank Group, KNOMAD, Bank, Cryptocurrency, COVID-19
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Summary
Key Points: 
  • Speaking at Global Fintech Fest (GFF) 2022, at a fireside chat with Smita Aggarwal, Global Investments Advisor of Flourish Ventures, Mr. Sopnendu Mohanty, Chief Fintech Officer, Monetary Authority of Singapore, said, In the new architecture of Web 3.0, asset transfers are not only done traditionally, therefore we need a new form of money that transacts on a distributed ledger.
  • It was held between September 20 and 22, 2022 at the Jio World Convention Centre in Mumbai.
  • We have successfully connected the UPI equivalent network of Singapore known as PayNow, with Thailands PromPay, to facilitate seamless cross-border transfers.
  • The retail CBDC can be extremely efficient and cost-effective and can even avert the need of a UPI rail for money transfers.


Speaking at Global Fintech Fest (GFF) 2022, at a fireside chat with Smita Aggarwal, Global Investments Advisor of Flourish Ventures, Mr. Sopnendu Mohanty, Chief Fintech Officer, Monetary Authority of Singapore, said, “In the new architecture of Web 3.0, asset transfers are not only done traditionally, therefore we need a new form of money that transacts on a distributed ledger. Therefore today, the central bank needs to come up with a new form of money - a legal tender that excludes private currencies, as it doesn't act like a payment instrument.” GFF 2022 was organised and presented by the Department of Economic Affairs, Ministry of Finance, Government of India, Reserve Bank of India, International Financial Services Centres Authority (IFSCA), National Payments Council of India, the Payments Council of India (PCI) and the Fintech Convergence Council (FCC). It was held between September 20 and 22, 2022 at the Jio World Convention Centre in Mumbai. Pre-event festivities began virtually on September 19, 2022.

“Under the new architecture, tokenisation will enable both asset ownership and transfer of value to happen in real-time,” Mr. Mohanty added.

Talking about the role of new technologies, Mr. Mohanty added, “The new form of money will lead to massive disintermediation whereby the connectivity between the central banks of different nations will not just bring down the cost of cross-border transfers but will also enable one to seamlessly use his local UPI anywhere in the world.”

“We have successfully connected the UPI equivalent network of Singapore known as PayNow, with Thailand’s PromPay, to facilitate seamless cross-border transfers. We are now planning to connect to India by end of this year, and also in Malaysia, which will bring about a significant drop in the cost of cross-border transfers,” he added.

According to Mr. Mohanty, ‘wholesale CBDC’ will not just make cross-border transfers more efficient and cost-effective but will also address challenges pertaining to regulations, processes and compliances.

Elaborating on the new design of retail CBDC, Mr. Mohanty said, “The biggest debate for the central bank is how to deal with this new form of money, which will rest on the four-pronged architecture of – cryptography, ledger, consensus protocol and distribution. The uncertainty really is not around cryptos or smart contracts but around the validation protocol and therefore if we get that right it will transform the entire sector. This is now gradually changing with Ethereum’s transition to ‘proof of stake’.”

“Additionally, the new form of money instead of retail CBDC should be designed as ‘programmable money’ which can be programmed for specific use-cases just like in the case of Covid grants. The retail CBDC can be extremely efficient and cost-effective and can even avert the need of a UPI rail for money transfers. This space needs to be watched out for especially for low-value transfers,” he added.

GFF 2022 is being supported by the Unique Identification Authority of India (UIDAI), National Investment Promotion & Facilitation Agency (Invest India), Startup India, Reserve Bank Innovation Hub (RBIH) and ONDC. Special Partners of GFF 2022 are World Bank Group, United Nations Capital Development Fund, BIS Innovation Hub, KNOMAD, Better Than Cash Alliance and International Finance Corporation (IFC).

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