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The State Bank of Vietnam (SBV) and the Bank of Thailand (BOT) have launched a joint QR payment service as an alternative means of cross-border payments between the two countries, first announced in March 2021. The central banks in ASEAN have been actively working towards achieving true payment connectivity in the region. Most recently, Bank Indonesia, Bank Negara Malaysia, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore, and BOT had inked a MoU for cross border payments.

The Bank for International Settlements (BIS) Innovation Hub, Banque de France, Monetary Authority of Singapore (MAS) and Swiss National Bank launched Project Mariana, to investigate the use of decentralized finance (DeFi) protocols to automate FX trading and settlement. The project will explore the use of automated market makers (AMMs) for the cross-border exchange of hypothetical CHF, EUR and S$ wholesale central bank digital currency (CBDC). AMM protocols combine smart contracts with pooled liquidity to price and transfer digital assets automatically.

The Monetary Authority of Singapore (MAS) has announced that it has succeeded in conducting wholesale transactions launching with a focus on exploring both digital assets and the Decentralized Finance (DeFi) ecosystem. A major highlight of the pilot test as confirmed by JPMorgan's Ty Lobban is that the MAS built the test environment around two of the industry's most used blockchain protocols including Polygon, a Layer-2 protocol on the Ethereum network as well as Aave, one of the pioneering DeFi lending protocols.

The BIS Innovation Hub (BISIH) has unveiled its 2023 work program. This includes previously unannounced projects on stablecoins, DeFi and CBDC, including Project Pyxtrial at the London Centre that will monitor stablecoins to ensure that the backing assets at least match the stablecoin issuance. And "going into its fourth year of life, the BIS Innovation Hub is reaching a cruising altitude, with 21 ongoing and five concluded projects. The Hub will increase the integration of its global network with additional cross-centre projects such as Mariana, which connects the Singapore, Swiss and upcoming Eurosystem centres, and others." https://www.bis.org/about/bisih/about.htm?m=1%7C441%7C713

"The report contains a detailed analysis of the legal position of custodial wallet services across Australia, Germany, Japan, Jersey, the Netherlands, Singapore, the UAE, the UK and the US. "

The Monetary Authority of Singapore (MAS) published a paper proposing a common protocol to specify conditions for the use of digital money such as central bank digital currencies (CBDCs), tokenized bank deposits, and stablecoins on a distributed ledger. The whitepaper was supported by the release of open source software prototypes that demonstrate the concept of purpose bound money (PBM), which enables senders to specify conditions, such as validity period and types of shops, when making transfers in digital money across different systems.

The IMF ran a peer learning event at its Singapore Regional Training Institute on July 6/7 at which Changchun Mu, Director General, Digital Currency Institute at the People's Bank of China gave a presentation on the e-CNY.

The Monetary Authority of Singapore (MAS) announced the commencement of Project Guardian, a collaborative initiative with the financial industry that seeks to explore asset tokenization use cases. The central bank will run pilot tests in four areas to test the feasibility of applications covering blockchain, trust anchors, asset tokenization and institutional-grade decentralized finance (DeFi) protocols. The first industry pilot will explore potential DeFi applications in wholesale funding markets, involving the creation of a permissioned liquidity pool comprising tokenized bonds and deposits. The pilot aims to carry out secured borrowing and lending on a public blockchain-based network through execution of smart contracts.

The Digital Identity Working Group (DIWG) has proposed a set of high-level principles to enable future mutual recognition and interoperability of digital identities. The members of the DIWG are from Australia, Canada, Finland, Israel, New Zealand, Singapore, the Netherlands, and the United Kingdom. This is the group's first set of publicly released work since its 2020 inception.

Cecilia Skingsley, First Deputy Governor of Sveriges Riksbank, appointed to head the Bank for International Settlements (BIS) Innovation Hub. The Hub serves as a platform for central bank collaboration in building technological solutions to problems in the financial sector. Five Hub Centers are already operating in Hong Kong, London, Singapore, Stockholm and Switzerland. Two more, in Frankfurt/Paris and Toronto, are expected to open later this year. The Innovation Hub also has in place a Strategic Partnership with the Federal Reserve System.

"The Luna Foundation Guard, a new decentralized organization developed to support the Luna ecosystem, has been launched last week in Singapore. The institution will offer funding in the form of grants to support initiatives built on top of the Luna network. One of its biggest functions will be to establish a "forex reserve" that will aid UST, the companion stablecoin of the Luna ecosystem, to maintain its peg."

SWIFT announced further progress on its experimental solution for interlinking central bank digital currencies (CBDCs), reporting that 18 central and commercial banks found "clear potential and value" in the API-based CBDC connector after a comprehensive review. SWIFT published the findings of the 12-week period of collaborative sandbox testing, in which almost 5,000 transactions were simulated between two different blockchain networks and with existing fiat-based payment systems. Sandbox participants included the Banque de France, the Deutsche Bundesbank, the Monetary Authority of Singapore, BNP Paribas, HSBC, Intesa Sanpaolo, NatWest, Royal Bank of Canada, SMBC, Société Générale, Standard Chartered and UBS. Over the coming months SWIFT will develop a beta version of the solution for payments that can be tested further by central banks. A second phase of sandbox testing will also be held, in which the SWIFT community can collaborate further with a focus on new use cases.

The Bank for International Settlements (BIS) Innovation Hub Eurosystem Centre, a joint effort by the BIS and all Eurosystem central banks, opened on March 28, 2023. The Centre will have offices in Frankfurt and in Paris, hosted and supported by the Deutsche Bundesbank and the Banque de France. The European Central Bank will coordinate the interactions of the Eurosystem with the Centre. The Centre's project focus areas will be decentralized finance (DeFi), wholesale central bank digital currency (CBDC), cyber security and green finance. Projects include Atlas, which will create an open-source data platform to provide information on DeFi and crypto-asset market capitalization, economic activity and international flows of crypto-assets, and Mariana, which will explore automated market-makers (AMM) for the cross-border exchange of Swiss franc, euro and Singapore dollar wholesale CBDCs.

"Nexus or Icebreaker? Two competing ideas are jostling for attention, each promising to reshape the inefficiency-ridden landscape of moving money from one country to another. Instead of trying to choose between them, central banks ought to give both a shot. The European payment system recently did a trial linkup with Malaysia and Singapore under the Bank for International Settlements' Nexus protocol, designed to transfer funds between bank accounts in different countries under 60 seconds. Meanwhile, the monetary authorities of Israel, Norway and Sweden have tested a separate BIS-backed initiative that achieves the same goal of fast cross-border retail payments. Project Icebreaker uses central bank digital currencies, or CBDCs, instead of bank accounts."

The Monetary Authority of Singapore (MAS) published a white paper on the first phase of its Global Layer One (GL1) tokenization initiative. GL1 is envisaged as a public permissioned distributed ledger technology (DLT) network developed by regulated institutions for use by the financial industry across jurisdictions to deploy inherently interoperable digital asset applications, governed by common standards and technology for assets, smart contracts, and digital identities. Financial institutions will be able to develop, deploy and use applications for financial industry use cases along the value chain, such as issuance, distribution, trading and settlement, custody, asset servicing, and payments. The whitepaper details the design principles, objectives, considerations and potential uses of GL1. GL1 plans to expand collaboration with more policymakers, central banks, regulators, international standards setting bodies and financial institutions as work on GL1 progresses.

The Bank for International Settlements (BIS) announced that phase three of Project Nexus, which is aimed at enhancing cross-border payments by connecting multiple domestic instant payment systems (IPS) globally, is now complete. The next phase will see Bank Negara Malaysia, Bangko Sentral ng Pilipinas, the Monetary Authority of Singapore, the Bank of Thailand and domestic IPS operators - who worked together in phase three - joined by the Reserve Bank of India, expanding the potential user base to India's Unified Payments Interface (UPI), the world's largest IPS. Bank Indonesia will continue its association with the project with special observer status. Nexus is designed to standardize the way domestic IPS connect to one another. Rather than an IPS operator building custom connections for every new country to which it connects, the operator only needs to make one connection to Nexus. This single connection would allow the IPS to reach all other countries in the network.

The Reserve Bank of India (RBI) joined Project Nexus, a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic fast payment systems (FPSs). Nexus, conceptualized by the BIS Innovation Hub aims to connect the FPSs of four ASEAN countries (Malaysia, Philippines, Singapore, and Thailand); and now India. Indonesia, which has been involved from the early stages, continues to be involved as a special observer. The platform is expected to go live by 2026. Once functional, Nexus will play an important role in making retail cross-border payments efficient, faster, and more cost effective.

Since ICOs and STOs are clearly here to stay it is worthwhile to take a look at what regulators in Asia are doing in response to this.

A number of crypto firms, including Ripple, Coinbase and Binance, have been granted an exemption from holding a license under the Payment Services Act for digital payment token services until July 28, 2020.