The Monetary Authority of Singapore (MAS) is set to launch a new series of asset tokenization pilots in partnership with 17 international banks.
This initiative extends MAS’s Project Guardian, which previously saw collaboration with 15 financial institutions to conduct industry pilots on asset tokenization involving fixed income, foreign exchange, and asset management products. The latest five pilot projects aim to explore various use cases related to listing, distribution, trading, settlement, and asset servicing.
Key pilot projects include:
– Citi, T. Rowe Price, and Fidelity International testing institutional-grade methods for pricing and executing bilateral digital asset trades efficiently, while also exploring real-time post-trade reporting and analytics.
– BNY Mellon and OCBC trialing a cross-border FX payment product.
– Ant Group developing a treasury management service for real-time multi-currency clearing and settlement through its global treasury center in Singapore, which supports over 40 currencies.
– Franklin Templeton looking into the issuance of a tokenized money market fund through a Variable Capital Company (VCC) structure, utilizing digital asset networks for maintaining fund share records.
– JPMorgan and Apollo collaborating on digital asset usage for investment management of discretionary portfolios and alternative assets, including automated portfolio rebalancing and customization.
Additionally, MAS is launching a new Project Guardian funds workstream aimed at the native issuance of VCC funds on digital asset networks.
MAS is also partnering with international policymakers and financial institutions such as BNY Mellon, DBS, JP Morgan, and MUFG to design an open digital infrastructure dubbed Global Layer One (GL1). This platform will facilitate the trading of tokenized assets across global liquidity pools while adhering to relevant regulatory guidelines.
Another initiative involves developing an Interlinked Network Model (INM) that will provide a framework for the exchange of digital assets across independent networks, allowing financial institutions to transact without being confined to the same network. A whitepaper detailing the practical application and design considerations of the INM has been published.
Recently, MAS collaborated with regulators from the UK, Switzerland, and Japan to enhance cross-border cooperation on the regulatory challenges and commercial use cases surrounding asset and fund tokenization. The group now also includes the International Monetary Fund for an international perspective on policy and legal issues.
Leong Sing Chiong, Deputy Managing Director of MAS, stated, “Project Guardian’s industry pilots have effectively shown that tokenized financial assets can be traded, distributed, and settled seamlessly across borders. To fully harness the potential of tokenized markets and achieve network effects, a scalable digital infrastructure is essential. GL1 will serve as a foundational digital backbone that connects markets with principles of openness and accessibility akin to the public internet. MAS invites more policymakers and financial institutions to join the design phase of the GL1 initiative and contribute to its development.”