The Monetary Authority of Singapore (MAS) has launched a report on the foundational digital infrastructure necessary for an inclusive digital economy and seamless cross-border transactions around the world.
The rapid growth of digital solutions has helped enhance the economic and social well-being of millions of people around the world. However, digital inclusion and inter-operability across solutions remain as challenges.
The report notes that foundational digital infrastructures – systems that allow different users and different digital devices to seamlessly interact with one another – are critical for more pervasive and inclusive digitalisation across societies.
Such foundational digital infrastructures will enable interoperable solutions and seamless digital services to reach more people and businesses, at lower cost and greater convenience.
The report highlights four key pillars that underpin effective foundational digital infrastructures:
- Digital Identity to ensure authentication and validation of an individual’s identity, while protecting privacy and security of information;
- Authorisation and Consent to ensure transparent and secure digital transactions through authorised use of data and mechanisms for obtaining users’ consent;
- Payments Interoperability to ensure systems for clearing and settlement of payments between users are interoperable, for seamless domestic and cross-border transactions;
- Data Exchange to enable users to make their data accessible to third parties for the benefit of the users, such as for payments, financial planning, etc.
Foundational digital infrastructures are public goods that governments have a vital role in providing or facilitating. Governments can do this through direct provision, or developing open standards for technical implementation, or guidance on best practices. Through their report, MAS aims to help public sector agencies and players in the financial sector and technology community better understand the key value drivers of strong digital infrastructures.
The MAS expressed gratitude for the support of the central banks of Brunei Darussalam, Cambodia, Ghana, and Kenya for this pioneering collaborative work with Mastercard. The insights gained from the different circumstances and experiences in digital infrastructures across these countries have helped to enhance the relevance of the report to a wider range of countries seeking to build the digital economies of the future.
MAS reported looking forward to engaging other financial regulators, the financial industry, and the international technology community to advance the work on foundational digital infrastructures. The next phase of the initiative will focus on building a consortium of countries who are keen to explore the digital infrastructure potential for cross-border use.