Digital technology is changing the world, and the epidemic has accelerated the pace of change. Nowadays, artificial intelligence and Internet of Things are more common. More activities are carried out online. The digital economy is growing rapidly, and there are even many undeveloped opportunities. However, with the networking of the world, malicious actors and threats also follow. Last year, cyber attacks against corporate networks increased by 50%, and ransomware attacks against the government increased by 20 times. The attacks on network security management software products and ColonialPipeline remind us that if not controlled, these threats will derail the digital economy.
A new wave of digital technology is emerging, which is called Web3.0.Metaverse, DeFi and DAO. Are these good or bad?
At this critical moment, we are gathered here from all corners of the country to hold talks.
In addition to the digital revolution, there are other structural changes, including a greater emphasis on sustainability and an aging population in some parts of the world. There are still many urgent challenges: learn to deal with COVID-19, manage the consequences of the Russian-Ukrainian war, and reduce the risk of global inflation and another global economic recession. Despite all kinds of problems, we must continue to concentrate on building a better future for the people. In the context of the digital revolution, this means keeping open to new subversion, responding decisively to threats and making full use of existing opportunities.
Let me share my thoughts on how to do this.
Open to new subversion.
First of all, we should treat new subversive things with an open attitude. Web3.0 is still a new thing and has not been fully defined. We have seen many enthusiastic supporters and critical skeptics. In particular, encrypted assets have aroused great interest. Earlier, it was due to its amazing growth and the promise of higher returns. Recently, it was because of the collapse of LUNA and the collapse of cryptocurrency. The way to approach Web3.0 is to keep an open mind. We must penetrate the veil of arrogance and suspicion, and understand the potentially transformative basic technology, not just kill it with a stick.
The underlying technology is worth further exploration.
Tokenization can split assets: this can achieve greater liquidity, better price discovery and access to illiquid assets.
Distributed ledger: Without intermediaries, it can reduce costs, prevent data monopoly and prevent rent-seeking behavior.
Allow simultaneous settlement: payment and delivery can be made at the same time, which can greatly reduce the settlement risk between the two parties.
The greatest potential of these new technologies may lie in cross-border transactions. One example is the Dunbar project, which unites the Innovation Center of the Bank for International Settlements, Singapore and several other like-minded countries. The Dunbar Project discusses how several central banks in digital currency can realize cheaper, faster and safer cross-border payment on the same platform. The project has verified various design methods through prototype design. It has recently issued some suggestions that will support the G-20 road map for strengthening cross-border payments. One of the technical support platforms of Dunbar Project is Partior, a technology company established by DBS Bank, Temasek and JPMorgan Chase. Partior realized real-time interbank clearing and settlement network based on blockchain, using commercial bank digital currency or wholesale CBDC.
The field of encrypted assets is constantly developing. We realize that this is a high-risk area, but it may also change the future of the financial industry. We must continue to adjust our rules to ensure that regulation is still conducive to innovation, while addressing the main risks posed by encrypted assets. Monetary authority of singapore (MAS) has been warning the public not to trade cryptocurrencies, and took measures to restrict the promotion of cryptocurrencies to the public earlier this year. In the recent crashes of TerraUSD and Luna, many investors suffered losses, even lost their life savings, which triggered a chain reaction to bitcoin and other cryptocurrencies.
Retail investors in particular should avoid cryptocurrencies. We can't emphasize this point too much. But the digital asset ecosystem includes all services except cryptocurrency transactions. We are still keen to cooperate with blockchain and digital asset participants to encourage innovation and build trust in this field. In the past two years, monetary authority of singapore has issued licenses and approved in principle to 1 1 digital payment token service providers. These include stable currency players such as Paxos, cryptocurrency exchanges such as Coinhako, and traditional financial institutions such as DBSVickers. We will continue to evaluate applications and promote field experiments through regulatory sandboxes for safe adoption in the financial sector.
Monetary authority of singapore has also been cooperating with the industry to carry out some digital assets initiatives. I am very happy to launch ProjectGuardian, a cooperative project in monetary authority of singapore, to explore the tokenization of financial assets, and to cooperate with the industry to develop future financial infrastructure. The first industry pilot will explore the potential application of DeFi in the wholesale capital market.
In short, we must treat emerging technologies with an open mind and separate arrogance from real potential. Through supervision, we make constructive efforts to realize the benefits of these new technologies, and cooperate with responsible and innovative participants with strong risk management capabilities to establish the foundation of the digital asset ecosystem.
Be alert to the growing threat.
Secondly, I will talk about how we deal with the threats in the network field. In order to make full use of the potential of the network field, we must guard against malicious activities, including cyber robbery, data theft and cyber terrorism. The good news is that the global network response is strengthening. It is predicted that in the next few years, the annual growth rate of global network security market will exceed 14%, which is faster than the growth of digital economy. Countries all over the world are formulating network security strategies, introducing legislation and building capacity.
Singapore has done the same job. We regard digital defense as the sixth pillar of comprehensive defense and update Singapore's cyber security strategy. We are also training network security professionals to meet the growing demand. At the same time, we are formulating broader social standards for network security, urging companies to take strong measures to process data and improve our people's network awareness. However, like most criminal activities, cyber threats are ultimately a cat-and-mouse game. We try to stay one step ahead of malicious actors, but these actors try to take advantage of new loopholes. The network environment is also developing rapidly, and quantum technology is a potential game changer. Powerful encryption technology is the key to digital network security. The current encryption standard AES256 has been maintained, because few people have the computing power to crack encryption violently.
But this situation may change with quantum computing. For some encryption functions, the fastest quantum computer is1.500 million times faster than the fastest supercomputer. Quantum computer can solve the problem that a supercomputer needs 10 thousand years in a few minutes. This is one of the reasons why quantum technology has become the focus of global research. Quantum is also a key research field of our national R&D plan. The quantum technology center in Singapore, namely CQT, is one of the outstanding research centers in China and a world-leading research institution in this field. Recently, we started the Quantum Engineering Project (QEP) to apply quantum technology to solve the needs of the real world, and to build quantum engineering capabilities and human capital. The latest initiative under the Quantum Engineering Program is the National Quantum Security Network, which seeks to deploy commercial quantum security communication technology in our energy network and other key networks and use it to process sensitive data, including data related to health care and finance.
Today, let me announce two new projects under the Quantum Engineering Program.
1. The first project is the National Quantum Computing Center, which is composed of experts from CQT and other institutions in Singapore. This will enable us to further strengthen personnel training, because this is a rapidly growing field and provides better opportunities for acquiring quantum technology.
2. The second project is the National Quantum Waferless Factory, which will support micro-nano processing of quantum equipment in the partner's clean room. Based on our advantages in advanced manufacturing, we seek to cooperate with the industry to develop more quantum devices to solve the challenges in the real world.
Our investment in quantum computing and quantum engineering is part of our attempt to predict the future and actively shape the future we want. The greater the potential in the network field, the greater the network risk. Malicious actors will profit from it by any means. It's not enough to just try to stay one step ahead. If we do this, we will often fall behind, catch up with and close the last threat. In order to deal with these threats, we not only need to be alert to the current threats, but also must continue to invest to stay ahead. In this way, we can widen the distance between the key parts of the digital domain and threats.
Cooperation releases potential.
This leads to the third point: cooperation releases potential. Many countries have formulated digital priority strategies, which strongly emphasize adoption, innovative investment and narrowing the digital divide. Singapore is doing the same. About ten years ago, we launched the Smart Village Movement. Digitalization and innovation are the core of our future economic strategy. We launched the digital life movement, enabling our people to take digitalization as their lifelong pursuit. We actively help small businesses and companies to digitize their payments and processes. If we cooperate extensively and effectively, these efforts can achieve more results. We are now promoting cooperation through platforms such as digital market and open innovation platform, which match real-world problems with innovative solutions. Since the new epidemic, the cooperation of open innovation platform has increased, and the platform has received more than 200 challenges since the outbreak of the epidemic. This platform is a good start. But the matching between problems and potential solutions is often fragmented. We need more proactive cooperation to better explore new opportunities. Stakeholders are working together to build a digital commons, so that everyone can get more return than their investment.
A good example is SGTraDex, a public-private partnership project initiated by me at last year's summit. Even in the best of times, the supply chain is not the most effective. The current crisis has further exposed the fragility of the supply chain. However, no company, no matter how advantageous, can optimize its supply chain and build greater flexibility on its own. SGTraDex is a * * * homogeneous data infrastructure with regulatory, logistics and trade financing data. This will enable supply chain participants to optimize the handling and operation of goods and build confidence in trade financing. The more companies join SGTraDex, the greater its value. From the beginning, we designed SGTraDex as a plug-and-play system, not a customized system.
In the past year, we tried three use cases to test the value of SGTraDex. These pilot projects have been very successful, saving a lot of money for current participants. I thank all the companies and institutions involved in this work, including PSA International and Trafigura Group.
We have now entered the next stage of SGTraDex, and plan to expand this digital commons in the next few years. We will expand SGTraDex to include more use cases, including green and sustainable trade financing. We will seek to get more companies in the supply chain ecosystem to join SGTraDex. With the passage of time, we hope to expand SGTraDex to foreign countries and contribute to the optimization of foreign supply chains.
SGTraDex is an example. We must invest in digital commons to release new opportunities. We must design an inclusive digital commons from the beginning, so that new participants can easily join. We must also establish a digital commons, so that all participants can get the value of creation fairly. Only through cooperation can we transcend the existing limitations and release new opportunities for improving everyone's life.
abstract
We are at a critical stage of global economic recovery, because we have got rid of the shadow of the new epidemic, but we have also encountered new challenges. Structurally, technological progress, especially digitalization, is reshaping the global economy. We must continue to devote ourselves to creating a better life for the people. I emphasize that we can do this in three ways.
1. First of all, keep an open mind about emerging technologies and separate arrogance from real potential.
2. The second is to be vigilant and invest in network security, so as to stay ahead of threats.
3. Third, release new opportunities through cooperation and build an inclusive digital commons through cooperation.