- Singapore’s MAS has advanced its asset tokenization initiative.
- The regulator said it planned to commercialize the initiative.
- Part of the scheme included supporting industry frameworks drafted by Project Guardian.
The Monetary Authority of Singapore (MAS) has announced new plans to support the commercialization of asset tokenization in the fixed income, foreign exchange (FX), and asset management sectors.
The development came almost a year after MAS launched five pilots via Project Guardian to test viable asset tokenization use cases with 17 institutional partners and a regulator group of four, including the UK’s Financial Conduct Authority (FCA), Japan’s Financial Services Agency (FSA), and the Swiss Financial Market Supervisory Authority (FINMA.)
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Since its inception, Project Guardian has recruited over 40 financial institutions and industry associations to conduct over 15 broad trials involving six currencies across multiple products.
Singapore Moves to Commercialize Asset Tokenization
According to a press release on November 4, the Monetary Authority of Singapore’s four-part plan to advance tokenization in financial services includes deepening the liquidity of tokenized assets through commercial networks and facilitating seamless cross-border transactions through an ecosystem of market infrastructures set up by Euroclear and HSBC.
MAS said it would also support sound industry frameworks to facilitate financial institutions’ broad acceptance and implementation of tokenized assets. The backing extends to two frameworks developed and published by Project Guardian on Monday, including the Guardian Fixed Income Framework (GFIF) and the Guardian Funds Framework (GFF).
While GFIF focuses on strengthening industry capabilities to drive the adoption of tokenized fixed-income solutions, GFF provides various recommendations, including the Guardian Composable Token Taxonomy, to develop tokenized investment vehicles.
“We are encouraged by the keen participation from financial institutions and fellow policymakers to co-create industry standards and risk management frameworks to facilitate commercial deployment of tokenised capital markets products, and scale tokenised markets on an industry wide basis,” MAS Deputy Managing Director, Leong Sing Chiong, stated.
The fourth plan is to enable access to a common settlement facility for tokenized assets, including S$ wholesale CBDC, for market testing purposes. The facility will also allow participants to evaluate programmable conditional triggers for tokenized transactions and their interoperability with existing financial market infrastructures.
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