Mumbai, India–(work wire) – speaking at Global Fintech Fest (GFF) 2022, In a conversation with Smita Aggarwal, global investment advisor at Flourish Ventures, Sopnendu Mohanty, Chief Financial Technology Officer at the Monetary Authority of Singapore, said, “In the new architecture of Web 3.0, asset transfers are not only done traditionally, so we need a form New money is transacted on the distributed ledger. Therefore, the central bank today needs to invent a new form of money – legal tender that excludes private currencies, because they do not act as a payment instrument.” GFF 2022 is organized and presented by the Department of Economic Affairs, Ministry of Finance, Government of India, Reserve Bank of India, International Financial Services Centers Authority (IFSCA), National Payments Council of India, Payments Council of India (PCI) and Fintech Convergence Council (FCC). It was held between 20 and 22 September 2022 at the Jio World Convention Center in Mumbai. The pre-event festivities began roughly on September 19, 2022.
“Under the new structure, tokenization will enable asset ownership and transfer of value in real time,” Mr. Mohanty added.
Speaking about the role of new technologies, Mr. Mohanty added: “The new form of money will eliminate a massive intermediary as connectivity between the central banks of different countries will not only lower the cost of cross-border remittances but also enable one to seamlessly use their own local UPI in anywhere in the world.”
“We have successfully connected the UPI network equivalent to Singapore, known as PayNow, with PromPay in Thailand, to facilitate seamless cross-border transfers. We are now planning to connect to India by the end of this year, as well as to Malaysia, which will significantly reduce the cost of cross-border transfers” .
According to Mr. Mohanty, “Wholesale CBDC” will not only make cross-border transfers more efficient and cost-effective, but will also address challenges related to regulations, operations and compliance.
Speaking about the new design for the Central Bank of Commercial Bank (CBDC) retail clients, Mr. Mohanty said: “The biggest debate for the central bank is how to deal with this new form of money, which will be based on the four-pronged architecture – crypto, ledger and consensus protocol. The uncertainty is not really about cryptocurrencies or smart contracts but about the verification protocol, so if we do this right, it will transform the entire sector. This is now gradually changing as Ethereum transitions to “Proof of Stake.”
“In addition, the new form of money rather than retail central bank currency should be designed as ‘programmable money’ that can be programmed for specific use cases just as in the case of Covid grants. Retail CBDCs can be highly efficient, cost-effective and can Also avoiding the need for a UPI railway to transfer funds. This space needs to be monitored especially for low value transfers.”
GFF 2022 is supported by India’s Unique Identification Authority (UIDAI), National Investment Promotion and Facilitation Agency (Invest India), Startup India, Reserve Bank Innovation Hub (RBIH) and ONDC. Special partners for GFF 2022 are the World Bank Group, the United Nations Capital Fund, the BIS Innovation Center, KNOMAD, the Better Than Cash Alliance, and the International Finance Corporation (IFC).