Singapore’s financial regulator will develop commercial use cases for tokenized assets, the next step after successful industry trials under Project Guardian.
The Monetary Authority of Singapore (MAS) announced plans to promote tokenization in the financial services industry. This will build on the practical lessons learned from Project Guardian’s pilots on the use of tokenized assets in capital markets, which were conducted in seven jurisdictions with the participation of more than 40 financial institutions and industry associations.
The steps the MAS plans to take to develop commercial scenarios for tokenized assets include:
- improving industry liquidity;
- developing cross-border market infrastructure;
- implementing industry standards;
- providing access to a common settlement mechanism.
The steps outlined were already put into practice, namely:
- Citi, HSBC, Schroders, Standard Chartered, and UOB formed an industry group, the Guardian Wholesale Network, which will facilitate capital raising and increase liquidity in the primary and secondary markets for tokenized assets.
- A Global Layer One (GL1) global infrastructure initiative is being developed with BNY, Citi, JP Morgan, MUFG, and Societe Generale-FORGE.
- The Project Guardian industry group created and published the Guardian Fixed Income Framework (GFIF) and Guardian Funds Framework (GFF), industry standards for tokenization processes in debt capital markets and tokenized investment instruments.
- The SGD Testnet is used as a common settlement mechanism to settle transactions with wholesale CBDCs in Singapore dollars.
Project Guardian was launched in 2022 and since then became one of the largest international projects in the field of tokenized assets, testing different scenarios of their use with the participation of major financial structures. A few days ago, the Singapore authorities announced the launch of the Global Finance & Technology Network (GFTN) project as part of a new stage of development of the local FinTech industry.
