The Monetary Authority of Singapore (MAS) has announced plans to advance asset tokenisation within the financial services sector.
This move aims to enhance how financial markets operate by representing assets like bonds and stocks digitally.
MAS has been exploring tokenisation through Project Guardian, which involves over 40 financial institutions and policymakers across seven jurisdictions.
The project has completed over 15 industry trials in six different currencies, testing a range of financial products.
A key focus of this initiative is deepening liquidity in tokenised asset markets, facilitating greater capital raising and trading.
To speed up progress, MAS is now pushing for participants to commercialise their findings, fostering a connected network for trading tokenised assets.
Leading banks such as Citi, HSBC, and Standard Chartered have formed the Guardian Wholesale Network to build this ecosystem.
MAS is expanding its Global Layer One (GL1) initiative to support cross-border transactions of tokenised assets.
GL1 will define control principles, develop specifications, and ensure “compliance by design” to align governance and risk management practices.
This includes programmable compliance, which automates regulatory checks.
The initiative will now include new contributors like Euroclear and will set up a working group to establish control principles for digital asset securities.
To support tokenisation, two new industry frameworks have been introduced: the Guardian Fixed Income Framework (GFIF), which sets out industry standards for tokenising debt, and the Guardian Funds Framework (GFF), which provides best practices for tokenised investment vehicles.
Access to a common settlement facility is also being facilitated through the SGD Testnet, featuring S$ wholesale central bank digital currency (CBDC) for market testing.
The SGD Testnet will be made available to eligible financial institutions participating in Project Guardian and Project Orchid, enabling them to settle transactions with S$ wholesale CBDC.
This facility includes key features such as issuance, transfer, and redemption of digital currency, as well as programmability with automated triggers and interoperability with existing financial market infrastructures.
Participating financial institutions like DBS, OCBC, Standard Chartered, and UOB will trial these settlements.
Leong Sing Chiong, Deputy Managing Director (Markets and Development) of MAS,
“MAS has seen strong interest in asset tokenisation in recent years, notably in fixed income, FX, and asset management.
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.”
Featured image credit: Edited from Freepik
