MAS Launches Initiatives To Advance Tokenized Finance In Singapore

Tokenization is gaining more popularity as important government bodies are also engaging with it as days go by. The Monetary Authority of Singapore (MAS) is planning to uplift tokenisation in the financial sector.

In a blog post, MAS said it plans to develop commercial networks, create an ecosystem for cross-border transactions, and build industry frameworks.

This initiative will add more tokenized asset liquidity, improve market structures, and enable robust settlement facilities. The agency’s approach under Project Guardian is a giant leap in the evolution of traditional finance with digital assets.

Singapore’s MAS Unveils Plans to Boost Tokenized Assets

Under Project Guardian, MAS collaborated with more than 40 financial institutions and regulatory bodies across seven countries on initiatives exploring tokenization in capital markets. More than 15 successful trials of tokenized assets in six currencies have been conducted. 

With the commercialization of these trials by industry players, MAS plans to streamline its networked rollout. This would connect various products and services across different currencies, thereby enhancing the processes of capital raising, trading, and settlement.

Citi, HSBC, Schroders, Standard Chartered, and UOB have recently joined forces in launching the Guardian Wholesale Network. The initiative promises an industry group that will facilitate a multi-member network with increased liquidity in tokenized primary and secondary markets.

In 2023, MAS launched the Global Layer One (GL1) initiative to build basic digital infrastructures for business networks. Since then, banks BNY Mellon, Citi, J.P. Morgan, MUFG, and Societe Generale-FORGE have collaborated to develop governance, risk, and technology standards for the GL1 platform. GL1 now aims to harmonize international governance and compliance frameworks.

Frameworks for Tokenized Asset Adoption

MAS has also released two novel frameworks, the Guardian Fixed Income Framework (GFIF) and the Guardian Funds Framework (GFF). GFIF defines industry standards for tokenized debt markets, whereas GFF provides guidelines for the development of tokenized investment funds. Those frameworks are intended to ease tokenization so that institutions can start processing these solutions.

MAS is also helping create access to a common asset for settlement. This includes wholesale CBDC in Singapore dollars (S$) on a network — the SGD Testnet. Selected financial institutions like DBS, OCBC, and UOB would be able to use the testnet for S$ CBDC payment and securities settlements mostra. Includes features such as automated transaction triggers and portals to existing financial infrastructures.

MAS Deputy Managing Director Leong Sing Chiong said that demand for tokenized assets has increased across the space including in fixed income and asset management. MAS’ efforts show a dedication to establishing a framework across the industry for deploying tokenized products securely with an underlying vision to scale tokenized markets worldwide.