What Project Guardian Reveals About Institutional Adoption of Tokenization

When the Monetary Authority of Singapore (MAS) launched Project Guardian in 2022, the goal was clear: test whether tokenization could deliver measurable improvements in efficiency, liquidity and transparency across capital markets. Three years on, the initiative has expanded into a global network of more than 40 institutions and regulators, producing pilots that show how processes once slowed by thousands of manual steps can be completed in seconds.

For institutions grappling with administrative costs, liquidity bottlenecks and settlement risk, these results illustrate why tokenization is increasingly seen as a practical tool rather than a theoretical exercise.

The strength of Project Guardian lies in its scope. It brings together regulators, including the UK’s Financial Conduct Authority, banks and asset managers to test applications across funds and asset classes. Areas under exploration include programmable compliance, cross-border settlement and integration with existing infrastructure - features that directly address institutional priorities.

By creating shared standards that can underpin regulated investment flows across jurisdictions, the initiative is positioning tokenization not as a parallel market but as an upgrade to the systems institutions already rely on.

From vision to real-world testing

Early pilots made the institutional pitch tangible. During a JP Morgan trial with a wealth manager that oversees over 100,000 client portfolios, a monthly portfolio rebalancing process typically involving over 3,000 manual steps was reduced to just a few clicks. The savings in time and operational overhead speak directly to efficiency pressures facing the industry.

Another pilot, run by Swift in partnership with UBS Asset Management and Chainlink, demonstrated that tokenized assets could be connected directly to existing payment systems. For institutions, the lesson was that tokenization does not require abandoning legacy infrastructure, it can complement it.

These outcomes highlight the features institutions value most: faster settlement, more transparent reporting and simplified ownership structures. For fund managers, this can translate into lower operating costs and more efficient portfolio construction. For investors, it opens access to asset classes that have traditionally been slow to trade, while introducing possibilities for fractional investments, automated income distribution and real-time auditability.

The focus has since broadened to long-standing frictions in cross-border finance. Settlement delays, pre-funding requirements and reconciliation costs remain significant obstacles in foreign exchange, and Project Guardian pilots in 2025 targeted these issues directly.

Ant International showed how tokenized deposits across multiple currencies could settle in minutes rather than days. BNY Mellon and OCBC achieved interoperability between their ledgers using hashed time-locked contracts, proving near-instant settlement without reliance on a central intermediary. HSBC, working with OSTTRA, tested payment-versus-payment orchestration to reduce settlement risk while improving transparency. Together, these pilots target the operational bottlenecks that have been limiting institutions’ efficiency and agility for decades.

Spurring institutional adoption

Adoption has already expanded from trials to real-world investments. Earlier this year, APS became the first European fund manager to make a direct allocation into tokenized real estate, investing €3 million in income-generating real estate assets executed through blockchain infrastructure.

In China, property developer Seazen revealed plans to explore tokenization as part of its corporate strategy. And in July, the Investment Association in London joined forces with the Investment Management Association of Singapore under Project Guardian, signalling that the frameworks being built in Asia are gaining traction in Europe’s fund industry.

Real estate offers a clear view of how these dynamics translate in practice. Across Europe, more than €50 million of property has already been tokenized, with over €1 million in rental income distributed to investors.

These figures demonstrate that tokenization can automate income flows, deliver transparency in ownership records and create potential for secondary markets in traditionally illiquid assets. For institutions, the impact is felt in lower administrative overhead, richer data reporting and, ultimately, greater competition on management fees - all of which enhance returns on invested capital.

Taken together, these developments demonstrate that tokenization is moving from pilot to practice. Project Guardian has created the frameworks and collaborative networks that give regulators and institutions confidence to engage. Pilots in portfolio management and payments are demonstrating measurable benefits, while direct allocations signal growing willingness to commit capital.

The key takeaway is that tokenization is solving problems institutions recognise: reducing settlement cycles, cutting operational costs, enabling improved portfolio rebalancing and delivering transparent, programmable compliance. That is why early pilots resonate so strongly with institutions: they have enabled real-world improvements to the infrastructure that underpins financial markets.