The Monetary Authority of Singapore (MAS), which is the country’s central bank, announced its plans to fund a blockchain technology project related to record keeping. This is part of the central bank’s five-year investment plan on financial technology developments.

Apart from funding the blockchain technology project, the funds will also be used to build innovation centers and fund financial tech projects. Its goal is to attract financial tech startups to build their companies in Singapore and enhance their standing as a smart financial center.

Blockchain Technology in Record Keeping

Other banks and governments have been looking into blockchain technology in terms of creating a more secure way to keep records. In Honduras, the government has worked with bitcoin-related companies in order to create a secure land registry. Meanwhile, several big banks in Australia are working with Ripple Labs to develop ways to enhance their internal operations.

Blockchain refers to the public ledger of transactions in bitcoin. These transactions are verified and updated by a network of computers solving complex algorithms in order to add a new block to the code. With that, the blockchain is considered immutable and transactions recorded are irreversible.

“The potential benefits of such a distributed ledger system include: faster and more efficient processing; lower cost of operation; and greater resilience against system failure,” said Managing director Ravi Menon.

Menon did say that there is still a lot of doubt on how far cryptocurrencies can go, but he noted that the underlying concepts show great promise. “Whether digital currencies will take off in a big way remains to be see,” he says. “One cannot rule out central banks themselves issuing digital currencies some day.”

He also pointed out that cryptocurrencies have a role to play in the future of finance, but mentioned that using blockchain technology in their operations could have regulatory repercussions.