In a groundbreaking move set to redefine the financial landscape, the Monetary Authority of Singapore (MAS) made a resounding declaration on November 15, 2023. MAS unveiled five additional industry pilots under Project Guardian. Blockchain application development stands as the foundation of this initiative’s success. 17 financial institutions within Project Guardian have launched five new industry pilots to explore innovative asset tokenization use cases. In the effort to strengthen the fundamental skills necessary for the exponential growth of tokenized markets, they signify a significant advancement.
Key Focus Areas of Financial Institutions
The five asset tokenization pilots can potentially transform various segments of the capital markets value chain. They encompass listing, distribution, trading, settlement, and asset servicing. Out of the 17 financial institutions that are members of Project Guardian, the following financial institutions are working on:
- Citi, T. Rowe Price Associates, Inc., and Fidelity International are actively testing institutional-grade mechanisms. These mechanisms are designed to price and execute bilateral digital asset trades efficiently. Their focus extends to the exploration of real-time post-trade reporting and analytics for digital asset transactions.
- Using a Variable Capital Company (VCC) structure, Franklin Templeton is exploring the issue of a tokenized money market fund. Using digital asset networks, this innovative approach maintains open records of fund shares.
- BNY Mellon and OCBC are testing a cross-border FX payment solution. This solution aims to facilitate secure and interoperable payments across diverse networks.
- Ant International is piloting a treasury management solution to strengthen global liquidity management funding. This creative solution enables immediate multi-currency clearing and settlement by using their global treasury hub, which is located in Singapore. Their global treasury hub is situated in Singapore and it can accommodate transactions across a spectrum of over 40 currencies.
- Collaboratively, J.P. Morgan and Apollo are utilizing digital assets to streamline investment and management processes for discretionary portfolios and alternative assets. They specialise in large-scale customization and automatic portfolio rebalancing. They want to significantly cut down on the amount of time spent on manual asset service procedures.
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Conclusion
Aside from the five active pilots, MAS also introduced Global Layer One, a project looking into building an open digital infrastructure specifically designed to house tokenized financial apps and assets. Additionally, in collaboration with the financial sector, the central bank is spearheading the development of an Interlinked Network Model. This model is set to function as a unified framework facilitating the exchange of digital assets among financial institutions operating across independent networks.
Moreover, MAS revealed that the International Monetary Fund (IMF) was one of the policymakers supporting Project Guardian’s endeavours.
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