Singapore’s MAS Proposes Design Framework for Interoperable Digital Asset Networks

Singapore’s central bank is proposing ways to design open, interoperable networks for tokenized digital assets.

The Monetary Authority of Singapore (MAS) presented the framework in a Monday report, which was produced in collaboration with the Bank for International Settlements’ (BIS) and other financial institutions.

The initiative, Project Guardian, has enlisted 11 institutions to test asset tokenization across financial asset classes. Pilot studies across wealth management, fixed income and foreign exchange will be carried out by banking giants such as HSBC, Standard Chartered, DBS and Citi, according to the announcement.

Standard Chartered, for instance, is developing an initial token offering platform to issue asset-backed security tokens listed on the Singapore Exchange. The bank will work with payments platform Linklogis.

“The initial pilot trade conducted in collaboration with Singapore Exchange and Linklogis proves the viability of assets-backed tokenization as an innovative originate-to-distribute structure, and the potential opportunities it presents to investors to participate in financing real-world economic activity,” said Kai Fehr, global head of trade and working capital at Standard Chartered, in a statement.

Singapore’s central bank is no fan of the crypto ecosystem, but has stated its commitment to promoting the technologies of the industry to improve existing traditional financial systems.

“While MAS strongly discourages and seeks to restrict speculation in cryptocurrencies, we see much potential for value creation and efficiency gains in the digital asset ecosystem,” said Leong Sing Chiong, MAS’ deputy managing director of markets and development, in the statement.

Last week, the MAS proposed standards for the use of digital money, including central bank digital currencies (CBDCs) and stablecoins.

Ian Allison contributed reporting.