The increased connectivity of the world has been exemplified by the swift spread of financial and economic shocks throughout the global economy and international financial system in 2008, and the global supply chain disruption emanating from Japan in 2011. Despite these changes, institutional arrangements and governance for policy cooperation and coordination have yet to reach the levels that are commensurate with the degree of global economic and financial integration. While individual efforts by any single economy are  BIS central bankers’ speeches  1  vital to ensure that they do not become a source of instability to other parts of the world, they can no longer guarantee collective stability. Emerging economies that are more open and integrated with the global economy and international financial system are the most affected by these developments. The global financial crisis forcefully demonstrated the importance of the international dimension of policy. In the early stage of the crisis, the coordinated policy rate cuts, the enhancement of U.S. dollar liquidity facilities by several key central banks, and the unprecedented and concerted fiscal expansion effort turned the tide of the global recession. The establishment of the Financial Stability Board (FSB) in 2009, together with the Basel Committee of Banking Supervision, has also been at the centre of much of the work on global financial sector reform. While this represents a positive step, the efforts remain recent and modest in an environment where the underlying changes were built up over an extended period of time, and had already become entrenched and widespread.

Making Cross-border Payments and Settlements Cheaper and Faster: Project Ubin Next, we must re-imagine a more efficient and secure way to conduct cross-border interbank payments and settlements. Cross-border payments today rely on a correspondent banking network. Banks hold balances with one another, and settlement occurs by adjusting these balances. There is counterparty risk, liquidity is split, and reconciliation is a major pain point. Cross-border transactions often take days to settle, and at high cost to customers. This is the problem that Project Ubin seeks to solve, using distributed ledger technology to enable entities across different jurisdictions to make payments directly with one another: without intermediaries; with much greater speed and efficiency, and at lower cost and risk. It is not an easy problem to solve, but we have made some progress. Last year, Phase 1 demonstrated that banks could conduct inter-bank payments without going through MAS, using a blockchain-based digital representation of the Singapore Dollar. Phase 2, just recently concluded, successfully produced three software prototypes that 7/9  BIS central bankers' speeches  achieved decentralised netting of payments, in a manner that preserved transactional privacy. MAS has received keen interest on Project Ubin from many parties, including academia and other central banks. We are committed to share what we have learnt, to encourage others to take a crack at solving this problem. We have just published the report on Phase 2. More significantly, MAS will release publicly, free-of-charge, the source codes for all three successful prototypes from Project Ubin Phase 2.