MAS is working on interoperable digital asset networks

The Monetary Authority of Singapore (MAS) presented the framework in a report produced in collaboration with the Bank for International Settlements’ (BIS) and other financial institutions. The initiative, called 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 entities 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 can prove 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, representatives of Standard Chartered said.

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.

Working on a global platform

While MAS is working in the country to set new standards, other entities such as the IMF pursue this goal at an international level. The International Monetary Fund (IMF) announced recently that it has been working on a platform for central bank digital currencies (CDBCs) to enable transactions between countries.

The IMF wants central banks to agree on a common regulatory framework for digital currencies that will allow global interoperability. Failure to agree on a common platform would create a vacuum that would likely be filled by cryptocurrencies. A CBDC is a digital currency controlled by the central bank, while cryptocurrencies are nearly always decentralised.

Already 114 central banks are at some stage of CBDC exploration, with about 10 already crossing the finish line. If countries develop CDBCs only for domestic deployment, they might be underutilising their capacity.