Singapore’s MAS Launches Project Guardian to Study Potential of Asset Tokenization

Key Takeaways

  • The pilot project led by DBS Bank, JP Morgan, and Marketnode involves the creation of a permissioned liquidity pool with tokenized bonds and deposits. 
  • The project will focus on Open, interoperable networks, Trust anchors, Asset tokenization, and Institutional grade DeFi protocols.
  • The official statement points out the pilot involves the creation of a permissioned liquidity pool comprising tokenized bonds and deposits.

Monetary Authority of Singapore(MAS) launches ‘Project Guardian’ to understand the feasibility of applications in asset tokenization and Decentralized Finance (DeFi) while managing risks. Project Guardian was launched by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat at the Asia Tech x Singapore Summit on May 31.

Mr. Han Kwee Juan, DBS head of group planning and strategy, believes the project will “ensure the competitiveness and relevance of Singapore as a cutting-edge financial center.” The pilot project, led by DBS Bank, JP Morgan, and Marketnode, aims to explore secured borrowing and lending on a public blockchain through the execution of smart contracts.

“Singapore’s central bank will collaborate with the financial industry in a pilot project to explore the economic potential and usefulness of asset tokenisation,” according to the official press release. Mr. Sopnendu Mohanty, chief fintech officer of MAS, commenting on the new initiative, said, “Project Guardian will serve to inform policy markets on the regulatory guard rails that are needed to harness the benefits of Decentralised Finance, while mitigating its risks.”

Umar Farooq, Chief Executive Officer(CEO) of Onyx, J.P. Morgan, talking about the recent developments said” J.P Morgan has co-innovated with MAS leading to several industry-first products and introduction of tokenised deposits on public blockchain is yet another milestone we look forward to launching”

MAS plans to develop and pilot use cases in four main areas, including that of Open, interoperable networks, Trust anchors, Asset tokenization, and Institutional grade DeFi protocols. The official statement points out the pilot involves the creation of a permissioned liquidity pool comprising tokenized bonds and deposits. Project Guardian will be working towards establishing a trusted environment for the execution of DeFi protocols using a common trust layer of independent trust anchors.

MAS, which is now opening up its door to understanding the world of digital assets, hasn’t always had a positive attitude towards crypto. MAS, in early January, had said that the trading of cryptocurrencies “is highly risky and not suitable for the general public, as prices of digital payment tokens are subject to sharp speculative swings.” Singapore’s Central Bank had earlier also told crypto service providers not to promote their services in the country.

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Saniya Raahath

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