The Future of the Financial Sector Will Rely on Blockchain, Says Singapore’s Fintech Chief

Sopnendu Mohanty, the Chief Fintech Officer of the Monetary Authority of Singapore (MAS), spoke at a panel at Blockshow Asia 2019 held at the Marina Bay Sands Expo and Convention Centre last week. In his panel on the topic of, "all that fintech with a layer of blockchain,” he explains the MAS’ role for blockchain adoption in Singapore and Asia. Mohanty said:

“Billions of the future of the financial sector relies on this whole shift from a physical to a digital world. Because there are certain financial stability implications, if you’re going with the right technology, but you don’t understand the relevance of the new technology, you may actually not have a lot of customers in the whole space. How to get to the right space is a big part of our effort.” 

The Chief Fintech Officer further explained that the regulator’s job is to be relevant to the people they serve and to be meaningful to the community and be responsible for showing that the financial services are relevant to the way it is designed today, as it can be designed for the future. 

The MAS' approach has been very different from a lot of global central banks. Mohanty commented: “I will say that we have been very different in our strategy. We have been very experimental in our approach, and we have been highly inclusive in taking new ideas.” 

Two major projects to look out for in Singapore 

The first major project was the Singapore Blockchain Ecosystem Report, in which the MAS collaborated with ConsenSys, Tribe Accelerator and Infocomm Media Development Authority (IMDA), and Temasek for the first joint public-private review of the local blockchain ecosystem.  

The second is Project Ubin, which was announced first at the Singapore Fintech Festival the same week. Project Ubin started in 2016 and has entered stage 5, and Mohanty believes that what the regulator has learned and, in his view, “blockchain is going to be the future architecture of our financial sector, it has to be.” 

“I say that with a lot of risks because if you look at the digital world, there are three big positives: face-less, presence-less and people-less,” explained Mohanty. He stated that these are the good factors in the online world that we are currently dealing with. “But there’s one negative thing, which is trust-less. It was almost counterproductive to this whole positive thing, and the only platform that can get customers to trust in the blockchain world.” 

Those who are investing their money and time on blockchain, “don’t lose hope” 

He further added: “If we don’t invest in this technology [blockchain], we will lose focus and discipline in trust. I think we have a problem unless there’s a better thing that comes in the near future, but that’s the genesis of trust.” Mohanty explained that the MAS took it on its financial payment system as a use case to drive this concept. 

The results of the experiment concluded that blockchain would be very useful in the cross-border payment system, as well as the trade finance space. 

By 2020, the MAS is expected as the year of huge production lines for blockchain. By 2020, Mohanty said that the MAS would get to one product grade case in the blockchain space. Mohanty directed at those who were investing their money and time on blockchain and said, “don’t lose hope.” 

The only regulator that took this whole thing seriously 

Regarding Xi Jinping’s recent announcement for encouragement in the blockchain space, Mohanty commented: "I think there's no bigger announcement vigorous endorsement for the world of blockchain what presence is happening since China announced [the news], I think everybody in China is talking about blockchain.” 

Redirecting the focus back to Singapore’s regulatory environment, Mohanty claimed: “People don't realize in Singapore, especially we put a huge bet on this technology three years ago, but everybody in the world was dismissing blockchain as a hype, you know we are the only regulator and institution, that took this whole thing seriously.”