The Monetary Authority of Singapore is to commence a new series of asset tokenization pilots in collaboration with 17 international banks.
The initiative is an extension to MAS’ Project Guardian, in which the central bank collaborated with 15 financial institutions to carry out industry pilots on asset tokenisation in fixed income, foreign exchange, and asset management products.
The five new pilot projects explore a new set of use cases including listing, distribution, trading, settlement, and asset servicing.
- Citi, T. Rowe Price. and Fidelity International are testing institutional-grade mechanisms to price and execute bilateral digital asset trades efficiently, and explore real-time post-trade reporting and analytics of digital asset trades.
- BNY Mellon and OCBC are trialling a cross-border FX payment product.
- Ant Group is testing a treasury management service for real-time multi-currency clearing and settlement through its global treasury centre in Singapore which supports over 40 currencies.
- Franklin Templeton is exploring the issuance of a tokenised money market fund through a Variable Capital Company (VCC) structure, which utilises digital asset networks to maintain the records of fund shares.
- JPMorgan and Apollo are collaborating on the use of digital assets for investment and management of discretionary portfolios and alternative assets, automated portfolio rebalancing and customisation at scale.
Singapore's central bank is additionally opening a new Project Guardian funds workstream focused on the native issuance of Variable Capital Company (VCC) funds on digital asset networks.
MAS is also collaborating with international policymakers and FIs including BNY Mellon, DBS, JP Morgan and MUFG to explore the design of an open, digital infrastructure that will host tokenised financial assets and applications. This new initiative, called Global Layer One (GL1), will enable tokenised assets to be traded across global liquidity pools, while meeting relevant regulatory requirements and guidelines.
Another project traces the development of an Interlinked Network Model (INM) which will serve as a common framework for exchanging digital assets across independent networks. This enables FIs to transact with each other without the need for all of them to be on the same network. A whitepaper which details how INM may be applied in practice and the design considerations for its implementation was published today.
Late last month MAS also joined up with regulators from the UK, Swizerland and Japan to foster closer cross-border collaboration among policymakers on the regulatory challenges, and commercial use cases of asset and fund tokenisation. MAS has now welcomed the International Monetary Fund to the group to provide an international perspective on the policies and legal issues.
Leong Sing Chiong, deputy MD, MAS, comments: “Project Guardian’s industry pilots have successfully demonstrated that tokenised financial assets such as fixed income, foreign exchange and asset management products can be traded, distributed, and settled seamlessly across borders. To fully realise the potential of tokenised markets, and achieve network effects, a scalable digital infrastructure is needed. GL1 will provide a foundational digital backbone and bring markets together with similar principles of openness and accessibility as the public internet. MAS welcomes additional policymakers and financial institutions to participate in the design phase of the GL1 initiative and contribute towards its development.”