Singapore Will Investigate Digital Asset Tokenization On Public Chains.
The Monetary Authority of Singapore (MAS) has launched Project Guardian, a blockchain-based digital assets trial that will employ tokenization. Regulatory financial institutions will serve as “trust anchors” in the scheme, with a test combining JP Morgan, DBS Bank, and Marketnode, the SGX joint venture for bonds.
Heng Swee Keat, Singapore Deputy Prime Minister and Coordinating Minister for Economic Policies, led the Project Guardian project, which was announced on Tuesday at the Asia Tech x Singapore Summit.
It will involve MAS investigating decentralized finance (DeFi) applications in wholesale funding markets by creating a liquidity pool of tokenized bonds and deposits to execute borrowing and lending on a public blockchain-based network.
Lessons from Project Guardian, according to MAS chief fintech officer Dr. Sopnendu Mohanty, will serve as a foundation for informing policy markets on the regulatory guard rails that are required to use DeFi while also limiting its risks.
In their wholesale banking activities, DBS and JPMorgan have both developed digital assets and blockchain technology.
DBS launched a $11 million digital bond in a security token offering last year. JPMorgan’s Onyx Digital Assets Network has processed over $300 billion in transactions since its debut in 2020.
DBS Bank has been involved in the cryptocurrency sector for a number of years and plans to launch its own institutional-grade cryptocurrency exchange in December 2020. The company has been gradually expanding the exchange’s supported digital asset services, with a crypto trust solution slated to debut in May 2021.
MAS has taken the lead in investigating the future of finance using DeFi protocols, becoming one of only a few large authorities to do so. If it is successful, it may help Singapore solidify its position as a global financial center.
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