The Monetary Authority of Singapore (MAS) published a report proposing a framework for designing open, interoperable networks for digital assets.
The report Enabling Open and Interoperable Networks was jointly developed with subject matter experts at the Bank for International Settlements’ (BIS) Committee on Payments and Market Infrastructure (CPMI), with contributions from participating financial institutions.
The report also considers how the CPMI-IOSCO principles for financial market infrastructures can be applied to evolving models of digital asset networks, taking reference from industry pilots launched under Project Guardian, which is MAS’ collaborative initiative with the financial industry to test the feasibility of applications in asset tokenisation and decentralised finance. The report is part of MAS’ effort to ensure that emerging digital asset networks are underpinned by international standards which promote safe and efficient financial market infrastructure.
MAS also announced an expansion of Project Guardian to test the potential of asset tokenisation across more financial asset classes. To support this, MAS has established the Project Guardian Industry Group, comprising 11 financial institutions (FI) which will lead industry pilots in asset and wealth management; fixed income; and foreign exchange.
In the area of asset and wealth management, pilots range from digital structured products to tokenised investment vehicles:
In the area of fixed income and foreign exchange, there are pilots in tokenised asset-backed securities, tokenised bonds, and tokenised bank liabilities:
MAS is also pleased to welcome the Japan Financial Services Agency (JFSA) as the first overseas financial regulator to join Project Guardian. This paves the way for MAS and the JFSA to collaborate on digital asset innovation and best practices for asset tokenisation, while safeguarding against risks to financial stability and integrity.
Leong Sing Chiong, deputy managing director of markets and development at MAS, said: “While MAS strongly discourages and seeks to restrict speculation in cryptocurrencies, we see much potential for value creation and efficiency gains in the digital asset ecosystem. This is why we are actively collaborating with the industry to foster a responsible and innovative digital asset ecosystem. As we enter this new phase of Project Guardian, we look
forward to collaborating with fellow policymakers and industry practitioners to jointly develop effective frameworks to guide the sound development of future financial networks.”
Mamoru Yanase, deputy director-general of the strategy development and management bureau, FSA, said: "We are delighted to join the Project Guardian. Decentralised financial ecosystem continues to develop in complexity, and it is important to address emerging risks. On the other hand, blockchain technology, including web3 could be a strong driver of innovation in the medium to long term. We look forward to working with MAS, traditional financial institutions and fintechs to further enhance our knowledge in this area.”
Re-disseminated by The Asian Banker