Lawrence Wong, Singapore’s Deputy Prime Minister and Minister for Finance, addressed attendees at the Singapore Fintech Festival, outlining key developments that will influence the nation’s fintech landscape in the coming years.
Wong welcomed the large turnout for the in-person event, underscoring the importance of human interaction even in today’s digital age. He emphasized that spontaneous meetings at the festival could lead to groundbreaking innovations, highlighting how technology can enhance resilience for companies and nations alike.
Referring to Singapore as a "red dot in a dangerous world," Wong stressed the country’s need to rely on itself for survival and prosperity. By adopting a mindset of "constructive paranoia" and what he called "divine discontent," Singapore remains committed to pushing boundaries and improving its standards.
Wong noted that investments made in digital infrastructure prior to the COVID-19 pandemic played a crucial role in keeping Singapore afloat and ensuring that essential financial services remained accessible to its citizens.
Purpose-Bound Digital Singapore Dollar to Be Tested
This week, the Monetary Authority of Singapore (MAS) released a report outlining the potential uses of a purpose-bound digital Singapore dollar (SGD) and the necessary infrastructure, marking the completion of Phase 1 of Project Orchid. This initiative allows consumers to set specific conditions for the use of digital money, opening up numerous use cases. As part of the trial, attendees at the Fintech Festival will have the opportunity to use this digital currency for purchases at select merchants during the event.
Addressing Cross-Border Payment Issues
Wong mentioned that while Singapore’s PayNow service facilitates instant money transfers between individuals and businesses, the cultural linkage established in 2021 between PayNow and Thailand’s PromptPay marked a significant milestone in real-time payment systems. Efforts are underway to develop similar connections with Malaysia and India.
Supporting MSMEs and Developing Integrated Trade and Finance Ecosystems
The MAS plans to collaborate with various partners, including local public entities in Ghana and organizations like the UNCDF and IFC, to promote financial literacy and foster financial trust. Wong emphasized that technology can empower small businesses and help individuals manage their finances effectively, reducing stress and enhancing financial resilience.
SGFinDex to Include Insurance Policy Information
During his keynote, Wong announced that individuals will soon be able to view their insurance policies through SGFinDex. This will enable Singaporeans to better identify protection gaps and gain a clearer picture of their financial status. "We aim to onboard more financial institutions and broaden the range of financial information available on SGFinDex to enhance financial planning convenience," he noted.
Cryptocurrency Perception: Risky, While Distributed Ledger Technology Offers Potential
Wong clarified Singapore’s stance on cryptocurrencies, stating, "The MAS firmly believes that speculative trading of cryptocurrencies is highly risky and unsuitable for the public, and our goal is to mitigate potential harm." He reinforced the country’s commitment to embracing distributed ledger technology, recognizing its transformative potential for financial markets. This commitment is exemplified by Project Guardian, which has conducted successful industry trials involving cross-currency transactions and the trading of tokenized securities.
Collaborating on ESG Use Cases
Acknowledging the nascent state of the current ESG fintech landscape, MAS will partner with KPMG and the Singapore FinTech Association to identify key use cases and strategies for growth in this area. Additionally, MAS plans to invest in new technologies aimed at decarbonizing the economy, including low-carbon hydrogen initiatives.
Funding Commitment through the Financial Sector Technology and Innovation Scheme
Following two previous funding rounds that yielded over S$300 million for nearly 1,500 projects, Wong announced a new commitment of S$150 million for the next three years through the Financial Sector Technology and Innovation Scheme (FSTI). This funding aims to foster innovation within the financial sector, particularly in areas like AI, analytics, RegTech, and cybersecurity, while also addressing new focus areas such as ESG fintech and Web 3.0.
Elimination of Corporate Cheques by 2025
Wong revealed plans to eliminate all corporate cheques by 2025, as their use has dramatically declined— from 32% of cheque-related payments in 2016 to just 7% in 2021. While MAS will pursue public consultation for this transition, they will also consider the needs of individuals, especially seniors, who may still feel uncomfortable shifting to digital payments. An extended timeline will be provided to ensure an inclusive transition to alternative payment methods.