Ghana, Singapore conduct trade in semi-fungible token pilot project

Project DESFT is meant to encourage trade between small businesses using a CBDC and a stablecoin, with an emphasis on credentialing.

The Bank of Ghana (BOG) and Monetary Authority of Singapore (MAS) have completed a proof-of-concept for the Digital Economy Semi-Fungible Token (DESFT) Project, according to various local press reports. The project is intended to encourage trade between micro, small and medium enterprises (MSMEs) in the two countries.

Within the project, live transactions have been carried out between the sides. To do so, they leveraged the Universal Trusted Credentials semi-fungible token protocol developed by the United Nations Development Program, according to Singapore-based Ample FinTech, which identified itself as the developer of the DESFT. The token contained verified licenses, certificates and trade records.

A stablecoin pegged to the Singapore dollar (XSGD) and the BOG’s e-cedi central bank digital currency (CBDC) were used for exchange within a Purpose Bound Money protocol on a distributed ledger.

The MAS developed the Purpose Bound Money protocol in conjunction with the International Monetary Fund and the central banks of Italy and South Korea. It incorporates both programmable money and programmable payment technology and has been tested by Amazon and other international retailers.

Related: Bank of Ghana to foster financial inclusion through CBDC project

Bank of Ghana director of fintech and innovation Kwame Oppong described the project at the 3i Africa Summit in Accra. He said:

“After nearly a year and two phases of development, we have crafted a reliable information exchange solution founded on UTC standards and Semi-fungible Token technology […] and conducted real trade experiments which fully align with our predetermined objectives.”

Oppong continued that the project’s future development would focus on supply chain finance and payments across multiple digital currencies.

Details were scarce in the press about the semi-fungible token technology. Ample FinTech said it operates on the ERC-3525 standard on top of the Ethereum blockchain.

According to an announcement of a panel discussion scheduled for the Singapore Fintech Festival in November, the Digital Economy Semi-Fungible Token “combines NFTs and traditional blockchain information” that enables the tokenization of self-ownership through the DESFT. 

The e-cedi is in its pilot phase. No launch date for the CBDC has been announced.