• MAS has announced a plan to promote asset tokenization in financial services.
• MAS is driving the commercialization of products and services under Project Guardian.

The Monetary Authority of Singapore (MAS) is planning to advance tokenization within financial services through a series of new regulatory measures. These initiatives are designed to foster commercial networks, enhance market infrastructure, and establish standardized frameworks for tokenized assets.

Besides, the MAS is facilitating the commercialization under Project Guardian by connecting a set of participants’ products and services across multiple assets. Through this, an improvement in capital raising, secondary trading, asset servicing, and settlement of tokenized assets may be realized.

Besides, several financial institutions like Citi, HSBC, Schroders, Standard Chartered, and United Overseas Bank (UOB) have formed the Guardian Wholesale Network industry group. It is to establish a multi-member network to commercialize their asset tokenization trials and scale usage.

Deputy Managing Director of MAS, Leong Sing Chiong stated:

“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.”

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Implementation of Tokenization

Two industry frameworks of MAS were developed by Project Guardian industry for the implementation of tokenized assets by financial institutions. In particular, the first is the Guardian Fixed Income Framework (GFIF) integrates the International Capital Market Association’s Bond Data Taxonomy, the Capital Markets and Technology Association’s Token Standards, and the Global Financial Markets Association’s Design Principles for Tokenised Securities.

Moreover, this aims to offer an industry guide to implementing tokenization in Debt Capital Markets to boost the industry’s capabilities. It also catalyzes the adoption of tokenized fixed-income solutions.

Secondly, the Guardian Funds Framework (GFF) tends to provide a set of guidances for industry best practices for tokenized funds. This incorporates the Guardian Composable Token Taxonomy for the development of tokenized investment vehicles comprising multiple assets.

Moreover, in 2023, the authority, MAS introduced the Global Layer One (GL1) initiative as a primary digital infrastructure. It offers seamless cross-border classification of tokenized commercial networks. Global banks such as BNY Mellon, Citi, J.P. Morgan, MUFG, and Societe Generale-FORGE are part of the development of the GL1 platform. It addresses governance, risk, legal, and technology requirements to support the tokenized financial ecosystem.

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