Financial regulators from the UK, Singapore, Switzerland, and Japan are collaborating on a project to explore fund and asset tokenization use cases and decentralized finance.
The Financial Conduct Authority (FCA) is joining forces with the Monetary Authority of Singapore (MAS), the Financial Services Agency of Japan (FSA), and the Swiss Financial Market Supervisory Authority (Finma) as part of this initiative.
This project builds on MAS’ Project Guardian, where the central bank worked with 15 financial institutions to conduct industry pilots focused on asset tokenization in various sectors, including fixed income, foreign exchange, and asset management products.
The pilots revealed significant potential for market and transaction efficiencies through tokenization; however, scale challenges require enhanced cross-border collaboration among policymakers and regulators.
The initiative aims to facilitate knowledge sharing and investigate the advantages, regulatory hurdles, and commercial applications of asset and fund tokenization.
Leong Sing Chiong, deputy managing director of MAS, emphasized the collaborative effort: “MAS’ partnership with FSA, FCA, and Finma reflects a strong commitment among policymakers to deepen our understanding of the opportunities and risks associated with digital asset innovation. Through this partnership, we aim to establish common standards and regulatory frameworks that will enhance cross-border interoperability and foster sustainable growth of the digital asset ecosystem.”