Singapore’s Central Bank Expands Asset Tokenization Initiatives Under Project Guardian

The Monetary Authority of Singapore (MAS) is commencing a series of asset tokenization pilots in collaboration with financial services heavyweights.

The central bank announced Wednesday that the initiative is an extension of the ambitious Project Guardian – involving 17 financial institutions. The collaborative efforts seek to explore various use cases in asset tokenization including listing, distribution, trading, settlement and asset servicing.

Further, MAS will collaborate with international policymakers and banking behemoths including BNY Mellon, DBS, JP Morgan and MUFG. The goal is to explore the design of an open, digital infrastructure to host tokenized financial assets.

Dubbed Global Layer One (GL1), the initiative will facilitate seamless cross-border transactions and trading of tokenized assets across liquidity pools.

Leong Sing Chiong, deputy managing director at MAS, stressed the importance of a scalable digital infrastructure needed to “fully realize the potential of tokenized markets, and achieve network effects.”

“GL1 will provide a foundational digital backbone and bring markets together with similar principles of openness and accessibility as the public internet.”

Five New Pilot Projects

The central bank of the city-state noted that the pilot tests will examine bilateral crypto trades, clearing and settlement in multiple currencies and fund management.

Citi, T. Rowe Price and Fidelity International are exploring real-time post-trade reporting and analytics of digital asset trades. While BNY Mellon and OCBC banks are testing a cross-border FX payment product.

Furthermore, Ant Group is testing a treasury management service for real-time clearing and settlement. Asset management giant Franklin Templeton is testing the issuance of a tokenized money market fund through a variable capital company (VCC) structure.

In the final pilot, J.P. Morgan and Apollo are collaborating  on leveraging digital assets for more investment and management of discretionary portfolios.

In addition to that, MAS announced the launch of a new Project Guardian funds workstream. It will focus on the native issuance of Variable Capital Company (VCC) funds on digital asset networks.