MAS joins the financial industry to expand digital asset tokenization
The MAS (Monetary Authority of Singapore) announced its operation with the financial industry to expand the asset tokenization initiatives and establish foundational capabilities to scale tokenized markets.
The developments will catalyze the adoption of virtual assets under the collaborative initiative of Project Guardian, aiming to unlock new investment opportunities, free up liquidity, and increase the financial market’s efficiencies.
Project Guardian has a group of 17 FIs (financial institutions) that has initiated five new industry pilots to evaluate the promising use cases of asset tokenization. This will pave the way for further integration across financial market value chains, including asset servicing, settlement, trading, distribution, and listing.
The MAS will launch a novel funds workstream considering the strong interest shown by the financial industry and focus on the Variable Capital Company (VCC) funds’ native issuance on virtual asset networks. This will address legal, policy, and tax considerations and increase distribution channels.
The MAS will collaborate with international FIs and policymakers such as JP Morgan, MUFG, and BNY Mellon to navigate the designs of digital open-source infrastructure before hosting tokenized applications and financial assets. The new initiative, Global Layer One (GL1), will allow hassle-free cross-border transactions and trading of tokenized assets across liquidity pools by fulfilling relevant guidelines and regulatory requirements.
The MAS will also collaborate with the industry to establish an Interlinked Network Model (INM) standard framework for trading digital assets across autonomous networks. MAS also welcomes the IMF staff to the policymaker group of Project Guardian, which comprises notable policymakers from Switzerland, the UK, Singapore, and Japan. IMF will give a perspective on the legal issues and policies to allow cooperation across cross-border platforms.
The Deputy Managing Director of MAS, Mr. Leong Sing Chiong, stated that the industry pilots of Project Guardian have successfully revealed that tokenized digital assets, including asset management, foreign exchange, and fixed-income products, can be settled, distributed, and traded seamlessly across geographical borders.
A scalable virtual infrastructure is required to realize the digital asset markets’ immense potential. Global Layer One will provide a basic digital backbone and unify financial markets, having the same principles of accessibility and openness as the Internet.
