Monetary Auth of Singapore MAS should issue the CBDC
I wish to put forward the reasons for MAS to issue the CBDC (central bank digital currency).

I shall give the name eCash to the CBDC. I will also explain how it can operate.

Why should MAS issue eCash?

It will replace the issue of currency notes and coins (which I will describe collectively as "cash"). It is costly to issue the notes and coins and for these notes and coins to be collected, counted and passed from one person to another in millions of transactions every day. 

The counting of coins as change is also time consuming. Quite often, the receiver does not have sufficient coins of the right denomination to give change.

The issue of eCash to replace the notes and coins should improve national productivity.

Why can't the government encourage people to use e-wallets, credit cards and internet banking transfers?

The answer is - the government has already taken these steps, and these forms of digital payment are quite popular and successful.

However, the current digital payments do not cater for a segment of the population, e.g. children and elderly people, who may not have access to a mobile phone or internet. These people will continue to use cash for its convenience and free of cost.

Some people also prefer to use cash for its anonymity. The eCash to be issued by MAS should also provide this option of anonymity.

How will the eCash platform work?

The eCash will be kept in a wallet (called the eCash wallet) that is issued and managed by MAS or an operator appointed by MAS.

Each e-Cash wallet is identified  by a unique number and token that is stored in a RFID card. The RFID card will be used to identify the e-Cash wallet.

The e-wallet can be identified to the owner or can be anonymous.

The customer can transfer money from a bank account into the eCash wallet by using an ATM machine or by internet banking transfer.

The customer can pay with by tapping the eCash card into the eCash device of the merchant. The merchant enters the amount into the device and the customer tap the card to authenticate the payment. 

The eCash device is shown in this video. The Tap Card is the RFID card that is linked to the eCash wallet.
https://www.youtube.com/watch?v=9QgZb0CU1qg&feature=youtu.be

The eCash platform can supplement the current modes of digital payment that are already used actively. It will replace the use of notes and coins. It will improve productivity, reduce operating cost and allow people to have the convenience and anonymity that they now enjoy.

I hope that MAS will consider this suggestion.

Tan Kin Lian





 

 

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