Singapore, 4 November 2024 – The Monetary Authority of Singapore (MAS) has announced a set of strategic initiatives aimed at advancing asset tokenisation in financial services. This move is part of Singapore’s ongoing Project Guardian, launched to explore asset tokenisation’s potential to transform capital markets.

Key Initiatives Unveiled

1. Establishing Commercial Networks for Tokenised Assets
   MAS has joined forces with over 40 financial institutions, spanning seven jurisdictions, to explore tokenisation. With successful trials conducted in six currencies, major institutions including Citi, HSBC, and UOB have formed the Guardian Wholesale Network. This industry group aims to deepen liquidity in tokenised markets by connecting financial products across multiple currencies and asset types.
2. Developing Market Infrastructures for Cross-Border Transactions
   MAS’s Global Layer One (GL1) initiative, launched in 2023, focuses on establishing foundational digital infrastructure for asset tokenisation. The GL1 platform is collaborating with leading global banks to create governance, risk management, and interoperability standards to streamline cross-border transactions. Euroclear and HSBC are the latest additions to this initiative, contributing to the development of secure, cross-compatible infrastructures.
3. Establishing Industry Standards for Tokenisation
   MAS also introduced two frameworks to standardise tokenisation in finance. The Guardian Fixed Income Framework (GFIF) and Guardian Funds Framework (GFF) aim to provide guidelines for implementing tokenisation across debt and fund markets, respectively. By setting clear standards, MAS hopes to drive industry adoption and integration of tokenised assets.
4. Introducing Common Settlement Facilities
   MAS is promoting regulated tokenised money as a common settlement asset to reduce market fragmentation. The newly launched SGD Testnet will allow select financial institutions, such as DBS and OCBC, to settle transactions using the Singapore dollar central bank digital currency (CBDC). This test network is designed with automated compliance features and interoperability with existing infrastructures.

Industry and Policy Support

Leong Sing Chiong, MAS’s Deputy Managing Director, commented, “MAS has seen strong interest in asset tokenisation, especially in fixed income, FX, and asset management. We are encouraged by the keen participation from financial institutions and policymakers to build a more interconnected and robust tokenised market.”

These initiatives underscore MAS’s commitment to fostering a digital economy, with tokenisation seen as a key driver of future financial innovation.