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November 04, 2024

Monetary Authority Of Singapore Announces Plans To Support Commercialization Of Asset Tokenization

In Brief

MAS plans to enhance tokenization within the financial services sector by forming commercial networks, developing an ecosystem of market infrastructures, creating industry frameworks, and facilitating access to a shared settlement facility for these assets.

Monetary Authority Of Singapore Announces Plans To Support Commercialization Of Asset Tokenization

The Monetary Authority of Singapore (MAS) revealed its strategy to enhance tokenization within the financial services sector by forming commercial networks to increase the liquidity of tokenized assets and developing an ecosystem of market infrastructures. Additionally, MAS plans to support the creation of industry frameworks for implementing tokenized assets and facilitate access to a shared settlement facility for these assets. 

Under its Project Guardian initiative, the MAS has brought together over 40 financial institutions, industry associations, and international policymakers from seven jurisdictions. These participants have conducted more than 15 industry trials, utilizing asset tokenization across six currencies and various financial products. 

Following the success of these trials, MAS is facilitating the commercial rollout of these products and services in a coordinated and networked manner. By integrating a wide range of participants’ offerings across multiple currencies and asset classes, the initiative aims to enhance capital raising, secondary trading, asset servicing, and settlement processes for tokenized assets.

This approach is anticipated to boost liquidity in primary and secondary markets for tokenized transactions. In line with these goals, Citi, HSBC, Schroders, Standard Chartered, and UOB have established the Guardian Wholesale Network industry group, which seeks to create a multi-member platform to commercialize their asset tokenization trials and expand their usage.

In 2023, the MAS launched the Global Layer One (GL1) initiative to promote the development of essential digital infrastructures. The expanded scope of GL1 will facilitate the trading of tokenized assets across borders, which is crucial for the growth of global markets. Specifically, the initiative will address Control Principles, Specifications, and a compliance-by-design approach. In order to advance these objectives, MAS has formed partnerships with Euroclear and HSBC.

MAS Introduces Frameworks To Enhance Adoption Of Tokenized Assets And Enhances Institution’s Access To CBDC 

Furthermore, in order to support the widespread adoption and implementation of tokenized assets by financial institutions, the MAS has introduced two industry frameworks. The Guardian Fixed Income Framework (GFIF) incorporates standards from various organizations to provide an industry guide to implementing tokenization in Debt Capital Markets, strengthen industry capabilities and catalyze adoption of tokenized fixed income solutions. In parallel, the Guardian Funds Framework (GFF) outlines recommended best practices for tokenized funds.

In addition, MAS is enhancing financial institutions’ access to common settlement assets, including the S wholesale Central Bank Digital Currency (CBDC), for market testing purposes. The initial test network, SGD Testnet, will feature three capabilities, including a settlement facility, programmability, and interoperability. This test network will be accessible to eligible financial institutions participating in Project Guardian and Project Orchid, allowing them to settle transactions using the S. The first group of participating institutions includes DBS, OCBC, Standard Chartered, and UOB.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

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