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The Monetary Authority of Singapore (MAS) has joined forces with blockchain technology firm R3 and a consortium of financial institutions on a proof-of-concept project to make blockchain-based inter-bank payments.

The consortium of financial services providers include Bank of America Merrill Lynch, The Bank of Tokyo-Mitsubishi UFJ, Credit Suisse, DBS Bank, HSBC, JP Morgan, OCBC Bank, Singapore Exchange, United Overseas Bank, while BCS Information Systems will serve as the project’s technology provider.

The project will seek to develop a pilot system that will leverage blockchain infrastructure to issue and transfer funds among participants.

The Singapore central bank said that this type of system would decentralise and distribute the software used for recording and validating payments, and hence, would be more resilient against stoppages.

MAS chief fintech officer Sopnendu Mohanty said: “The simplification of processes that comes from having a single and coherent, distributed record of information makes Blockchain technology an attractive solution for the financial sector.

“MAS is engaging with the industry and working closely with our partners to explore innovative payment solutions.”

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Results derived from the project will serve as a guide to future projects such as blockchain-based cross border payments, automation of securities issuance, trading and settlement, MAS said.

R3 Lab and Research Center CEO and MAS International Technology Advisory Panel member Tim Grant said: “Payments and the representation of fiat currency on Blockchains is a potentially significant use case for distributed ledger technology and we firmly believe that partnership between regulators, central banks and the financial services sector will accelerate solutions to maturity.”