MAS is is taking significant steps to ensure the safe and efficient development
Singapore’s Monetary Authority, in collaboration with the Bank for International Settlements’ Committee on Payments and Market Infrastructure, has released a comprehensive report outlining a framework for the design of open and interoperable networks for digital assets. The report, titled “Enabling Open & Interoperable Networks,” aims to establish international standards that promote secure and efficient financial market infrastructure.
As part of its efforts to ensure the sound development of emerging digital asset networks, the Monetary Authority of Singapore (MAS) has expanded its Project Guardian initiative. This collaborative project with the financial industry focuses on testing the feasibility of asset tokenization and decentralized finance applications. The report also explores how the principles for financial market infrastructures set by the CPMI-IOSCO can be applied to evolving models of digital asset networks.
MAS has formed the Project Guardian Industry Group, comprising 11 prominent financial institutions, to lead industry pilots across various financial asset classes. These pilots will explore the potential of asset tokenization and its benefits in areas such as asset and wealth management, fixed income, and foreign exchange.
In the field of asset and wealth management, HSBC, Marketnode, and UOB successfully concluded a technical pilot on the issuance and distribution of digitally native structured products. The pilot demonstrated the potential for lower costs, reduced settlement times, customization, and broader distribution within the structured product chain. Other pilots in this domain include UBS Asset Management’s exploration of native issuance for Variable Capital Company (VCC) funds and Schroders’ partnership with Calastone to develop a tokenized investment vehicle.
Within fixed income and foreign exchange, Standard Chartered collaborated with Linklogis to develop a platform for the issuance of asset-backed security tokens. DBS Bank, SBI Digital Asset Holdings, and UBS AG are conducting a pilot on repurchasing agreements with digitally issued bonds. Additionally, Citi is testing the pricing and execution of digital asset trades on a distributed ledger to improve post-trade reporting and analytics.
MAS has also welcomed the Japan Financial Services Agency (JFSA) as the first overseas financial regulator to join Project Guardian, marking a significant milestone in international collaboration. This partnership between MAS and JFSA aims to enhance knowledge in the areas of digital asset innovation and best practices for asset tokenization while safeguarding financial stability and integrity.
Leong Sing Chiong, Deputy Managing Director (Markets and Development) at MAS, emphasized the authority’s commitment to fostering a responsible and innovative digital asset ecosystem. While discouraging speculation in cryptocurrencies, MAS recognizes the potential value creation and efficiency gains in the digital asset space. The organization looks forward to collaborating with policymakers and industry practitioners to develop effective frameworks that guide the future development of financial networks.
Mamoru Yanase, Deputy Director-General of the Strategy Development and Management Bureau at the Japan Financial Services Agency expressed enthusiasm for joining Project Guardian as an observer. Yanase highlighted the importance of addressing emerging risks in the complex decentralized financial ecosystem while recognizing blockchain technology’s potential as a driver of innovation.
With the publication of the framework and the expansion of Project Guardian, Singapore’s Monetary Authority is taking significant steps to ensure the safe and efficient development of open and interoperable digital asset networks. By collaborating with industry experts and international regulators, MAS aims to promote responsible innovation in the rapidly evolving landscape of digital assets.
Tags: MASProject Guardian
