Second, a digital Singapore dollar could possibly foster an efficient and inclusive payment ecosystem. It could make it easier for smaller firms to build new payments and related digital services. Start-ups, for instance, can integrate with the retail CBDC and not need to build their own e-money and user base. This financial inclusion rationale has been a key motivation for countries like Cambodia and the Bahamas to adopt retail CBDCs. Third, a digital Singapore dollar could mitigate against the encroachment of privately issued stablecoins or foreign CBDCs in Singapore’s payments landscape. As these global digital currencies enter our market and become widely accessible in the future, they could potentially displace the use of the Singapore dollar in domestic retail transactions. A digital Singapore dollar issued by MAS that is congruent with the needs of a digitalised economy could go some way to mitigate this risk. 3/8  BIS central bankers' speeches  But issuing a retail CBDC is not a straightforward decision. Retail CBDCs can potentially pose significant risks to monetary and financial stability. There could be some disintermediation of the banks, particularly during stress periods if people can switch deposits into risk-free central bank money at the “click of a button”. Even in normal times, if people held a significant portion of their deposits in the form of digital Singapore dollars with MAS, it would considerably reduce our banks’ capacity to make loans.

A good way to start making sense of Web 3.0 is through refreshing our understanding of Web 1.0 and 2.0. • Web 1.0 is the “readable” Internet, centred on access to information and where most users were consumers of content. It is about web pages, emails, and chatrooms. • Web 2.0 is the “interactive” Internet, with rich exchanges of information and usergenerated content and collaboration. Key features are blogging, tagging, and social media. • Web 3.0 is the “personal” Internet, empowering end-users through applications that allow the decentralised sharing of information. The key enablers of this new paradigm are smart contracts and tokenised assets. Smart Contracts and Tokenisation Smart contracts are computer programmes that automatically execute actions according to the terms of the contract. Tokenised assets, implemented as smart contracts, are digital representations of real-world assets. They could be physical assets such as commodities and real estate; or intangible property such as financial assets, patents, or digital music and art. Once tokenised, rights and ownership of these assets could be transferred seamlessly, improving liquidity and efficiency. This has the potential to substantially enhance economic opportunity and inclusion. Smart contracts and tokenisation are already being used to enhance the market infrastructure for financial assets in Singapore. • Olam International issued last year a digital bond on SGX’s digital issuance, depository and servicing platform. • SembCorp through UOB Bank issued a digital bond this year on the ADDX digital securities platform, eliminating manual processes in custody and post-trade administration through smart contracts on a blockchain.