Singapore’s MAS Launches Project Guardian, Transforming Global Finance with Asset Tokenization

Key Points:

• MAS collaborates with 17 financial giants, initiating 5 pilots to test asset tokenization. Citi, Fidelity, and others explore real-time post-trade reporting and FX solutions.
• MAS pioneers GL1, a digital infrastructure with BNY Mellon, DBS, JP Morgan, and MUFG. Facilitating cross-border transactions, GL1 aims to trade tokenized assets globally, adhering to regulatory standards.
• The International Monetary Fund (IMF) joins Project Guardian, providing an international perspective on cross-border platforms. Deputy MD of MAS urges stakeholders to contribute to GL1 development.

The Monetary Authority of Singapore (MAS) has unveiled Project Guardian, a strategic initiative aimed at expanding asset tokenization and building foundational capabilities for scalable tokenized markets.

The project, in collaboration with a group of 17 financial institutions, is set to revolutionize the institutional adoption of digital assets, fostering liquidity, unlocking investment opportunities, and enhancing overall market efficiency.

Under Project Guardian, 17 leading financial institutions are initiating five industry pilots to explore and test various asset tokenization use cases. These pilots span across critical components of the capital markets value chain, including listing, distribution, trading, settlement, and asset servicing. Notable participants such as Citi, T. Rowe Price Associates, Inc., and Fidelity International are focusing on institutional-grade mechanisms for pricing and executing bilateral digital asset trades efficiently.

MAS Redefines Cross-Border Trading Landscape

Additionally, MAS is launching a funds workstream within Project Guardian to cater to the funds industry’s strong interest. This new workstream will focus on the native issuance of Variable Capital Company (VCC) funds on digital asset networks, addressing tax, policy, and legal considerations while expanding distribution channels for asset managers.

MAS is also spearheading digital infrastructure initiatives, collaborating with international policymakers and financial institutions to design Global Layer One (GL1). GL1 aims to provide an open, digital infrastructure facilitating seamless cross-border transactions and enabling the trading of tokenized assets across global liquidity pools while adhering to regulatory guidelines.

Moreover, MAS is working on an Interlinked Network Model (INM), a common framework for exchanging digital assets across independent networks. This INM allows financial institutions to transact with each other without requiring alignment on a single network, fostering interoperability in the digital asset space.

The initiative has garnered international attention, with the International Monetary Fund (IMF) joining Project Guardian’s policymaker group. This group, comprising representatives from Japan, Singapore, Switzerland, and the UK, aims to provide an international perspective on policies and legal issues surrounding cross-border platforms.

Mr. Leong Sing Chiong, Deputy Managing Director (Markets and Development) at MAS, emphasized the success of Project Guardian’s industry pilots and the need for a scalable digital infrastructure. He invited additional stakeholders to participate in the GL1 initiative’s design phase, emphasizing principles of openness and accessibility akin to the public internet.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.