Financial market regulators in Japan and Singapore have joined forces as part of the Project Guardian initiative, which aims to study the impact of asset tokenization technology on financial stability.
The Financial Services Agency (FSA) of Japan announced a partnership with the Monetary Authority of Singapore (MAS) to jointly regulate and test cryptocurrency projects as part of the Project Guardian initiative.
The project aims to test the feasibility of digital technologies such as asset tokenization. The initiative aims to identify risk management capabilities and the impact of Web3 technologies on financial stability. As a reminder, the MAS recently reported on a number of Project Guardian studies aimed at studying the trading of tokenized assets in OTC trading, interbank transactions and for trade finance.
At this stage, FSA participation will be limited to an observer role. According to Mamoru Yanase, Deputy Director General of Strategy Development and Management at FSA, Web3 technology has the potential to be a strong driver of innovation, and FSA is looking to expand its knowledge in this area. In his view, participation in Project Guardian will enable Japan to support global efforts as part of the development of the digital asset ecosystem.
As a reminder, Japan has previously participated in Project Guardian. MAS successfully tested tokenized bonds trading with the Japanese government and the Japanese yen (JPY) in 2022.
