MAS assesses economic case for retail CBDC

November 2021

The Monetary Authority of Singapore (“MAS”) has published a paper setting out its initial assessment of the economic case for a retail Central Bank Digital Currency (“CBDC”) in Singapore and its potential implications for financial stability and monetary policy.

The paper makes two main related inferences:

  • First, a review of the literature and assessment of the current payment landscape do not suggest strong economic motivations for, nor intractable monetary and financial stability considerations against, a retail CBDC in Singapore.
  • Second, emerging digital complementarities and global competitive forces could shape a future monetary arrangement that includes the possibility of a digital form of the Singapore dollar issued by MAS for general use.

Accordingly, MAS’ strategic approach towards a retail CBDC for Singapore acknowledges the dynamic nature of the payment landscape, evolving public preferences and the potential of nascent technology solutions. While there is no need to issue a Singapore dollar retail CBDC at this point, it is prudent for MAS to embark on exploratory work to develop the technical and policy capabilities for its possible issuance in the future.