The Monetary Authority of Singapore is advancing tokenized asset adoption by creating commercial networks, targeted industry support, and shared frameworks.
The Monetary Authority of Singapore (MAS) has announced plans to build commercial networks and deepen the liquidity of tokenized assets. The regulator aims to foster an ecosystem that will support the adoption and scalability of tokenized assets, specifically within sectors like fixed income, foreign exchange (FX), and asset management.
Leong Sing Chiong, deputy managing director of Markets and Development at MAS, expressed optimism over the high level of interest shown by both financial institutions and international policymakers, stating:
“We are encouraged by the keen participation…to co-create industry standards and risk management frameworks to facilitate commercial deployment.”
To create a robust ecosystem, MAS has introduced plans for shared infrastructure and industry-wide frameworks to support the development and growth of tokenized assets. This initiative will open up access to settlement platforms and develop the infrastructure needed to support the adoption of tokenized financial services.
Project Guardian
Singapore is known for being one of the four ‘Asian Tigers’ — alongside Hong Kong, South Korea, and Taiwan. In recent years, the island nation’s government has adopted a pragmatic and targeted approach to cryptocurrencies, recognizing their economic and social potential. According to 2022 reports, Singapore is the most crypto-friendly country. It has recently granted regulatory licenses to several foreign crypto exchanges including Gemini.
Project Guardian is a collaborative initiative launched in 2022 aimed at exploring the tokenization of real-world assets (RWAs) to bring efficiency and liquidity into financial markets. The project now involves over 40 participants, including industry associations and policymakers from seven jurisdictions.
The Japan Financial Services Authority (FSA) joined Project Guardian in mid-2023, a milestone that reflects a growing international interest in tokenization efforts.
Since the project’s inception, MAS has been testing industry pilots to gauge the opportunities and risks of tokenization while setting standards for ecosystem development. Last year, UBS Asset Management launched Singapore’s first pilot for tokenized Variable Capital Company (VCC) fund under the initiative, demonstrating the potential for tokenization in investment vehicles.
Industry-Wide Frameworks
MAS’s latest advancement in Project Guardian includes the release of two new frameworks. The Guardian Fixed Income Framework is designed to regulate tokenization in debt capital markets. This framework aims to streamline tokenized fixed-income solutions and build industry capacity for adoption by establishing standardized processes.
In addition, the Guardian Funds Framework offers recommendations for best practices in creating tokenized investment funds. This includes guidance on designing diversified tokenized investment vehicles, addressing industry concerns around compliance and governance, and encouraging broader adoption of tokenized funds.
Notably, Australian banking giant ANZ joined Project Guardian in September this year, a move that underscores the project’s global reach. As the frameworks are set in motion, MAS is expected to continue its efforts toward building a tokenized ecosystem, with international partnerships accelerating its development.
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