The Monetary Authority of Singapore (MAS) is advancing tokenization in financial services by launching Project Guardian, a collaborative initiative involving major financial institutions to develop and commercialize tokenized assets, including fixed income and funds.

Deepening Liquidity of Tokenized Assets

The Monetary Authority of Singapore (MAS) has revealed plans to advance tokenization in financial services. The regulator proposes to achieve this by creating commercial networks to deepen the liquidity of tokenized assets.

According to a Nov. 4 statement, the Singaporean regulator has assembled a group of more than 40 financial institutions, associations, and policymakers to carry out trials of asset tokenization in capital markets. Known as Project Guardian, the initiative will see MAS facilitate the coordinated commercialization of asset tokenization.

As part of this initiative, banking giants Citi, HSBC, Schroders, Standard Chartered, and UOB have formed the Guardian Wholesale Network industry group to commercialize their respective asset tokenization trials and scale usage.

Commenting on the plans to support commercialization of tokenized assets, Leong Sing Chiong, deputy managing director of MAS, said:

MAS has seen strong interest in asset tokenisation in recent years, notably in fixed income, FX, and asset management. We are encouraged by the keen participation from financial institutions and fellow policymakers to co-create industry standards and risk management frameworks to facilitate commercial deployment of tokenised capital markets products, and scale tokenised markets on an industry wide basis.

In addition to seeking to deepen the liquidity of tokenized assets, the MAS is expanding the scope of its Global Layer One (GL1) platform to support the development of an ecosystem of compatible market infrastructures. Launched in 2023 to foster the development of foundational digital infrastructures, the GL1 will seek to enable the seamless trading of tokenized assets across borders.

To achieve this, GL1 will undertake additional activities, including aligning governance, risk management controls, and settlement arrangement conventions.

Furthermore, the MAS also unveiled two industry frameworks developed by Project Guardian industry group members. The Guardian Fixed Income Framework (GFIF) integrates the International Capital Market Association’s Bond Data Taxonomy, Capital Markets and Technology Association’s Token Standards, and the Global Financial Markets Association’s Design Principles for Tokenized Securities. The Guardian Funds Framework (GFF) on the other hand provides a set of recommendations for industry best practices for tokenized funds.