In this rapidly evolving cryptocurrency industry, countries across the globe are moving forward with new initiatives to become a crypto/web3 hub. Recently, the Monetary Authority of Singapore (MAS) has revealed its ambitious initiative, Project Guardian, in collaboration with key financial institutions, aiming to propel the adoption of digital assets on a global scale. The project is expected to increase financial market efficiency, release liquidity, and offer up new investment opportunities.
Expanding asset tokenization initiatives
Under Project Guardian, a syndicate of 17 major financial institutions is pushing five innovative industry pilots to test asset tokenization use cases. Notable initiatives include:
- Citi, T. Rowe Price, and Fidelity International: Exploring institutional-grade mechanisms for pricing and executing bilateral digital asset trades efficiently, along with real-time post-trade reporting and analytics.
- BNY Mellon and OCBC: Piloting a cross-border FX payment solution for secure and interoperable payments across diverse networks.
- Ant Group: Testing a treasury management solution to boost global liquidity management through real-time multi-currency clearing and settlement.
- Franklin Templeton: Exploring the issuance of a tokenized money market fund through a Variable Capital Company (VCC) structure.
- J.P. Morgan and Apollo: Collaborating on the use of digital assets to streamline investment and management processes, including automated portfolio rebalancing.
Additionally, due to high demand from the funds industry, MAS is launching a funds workstream within Project Guardian, focusing on the native issuance of Variable Capital Company (VCC) funds on digital asset networks.
Launch of digital infrastructure initiatives
MAS is collaborating with major financial institutions like BNY Mellon, DBS, JPMorgan, and MUFG to establish Global Layer One (GL1), a digital infrastructure. GL1 aims to facilitate cross-border transactions and trading of tokenized assets globally while complying with regulations.
Additionally, MAS is developing an Interlinked Network Model (INM) to enable seamless asset exchange across independent networks. The International Monetary Fund (IMF) is part of Project Guardian, offering insights on cross-border platform policies and international monetary system stability.
Recently, on October 30, 2023, MAS collaborated with several European countries, the financial services agency in Japan, the Swiss Financial Market Supervisory Authority (FINMA), and the United Kingdom’s Financial Conduct Authority (FCA).
This collaboration aims to promote digital asset pilots with a greater focus on fixed-income, foreign exchange, as well as asset management products, including ETFs. This effort is also a part of the significant tokenization project known as Project Guardian.
MAS deputy managingdDirector’s statement
However, Mr. Leong Sing Chiong, Deputy Managing Director at MAS, highlights that Project Guardian’s pilots show seamless cross-border trading of tokenized assets. GL1, a scalable digital infrastructure, is crucial for open tokenized market potential, aligning with exposure and accessibility principles.
MAS invites more participation from policymakers and financial institutions to shape GL1’s future. This significant development by MAS highlights Singapore’s commitment to advancing the global digital asset landscape and leading in this emerging industry.