Singapore’s Monetary Authority (MAS) is consolidating the projects and participants required to advance its asset tokenization initiatives.
Scaling Up Tokenization Efforts
At the inaugural MAS Layer One Summit, deputy managing director Leong Sing Chiong highlighted the successes achieved by major financial institutions involved in Project Guardian, which demonstrated tokenization’s potential in foreign exchange and funds. Over 40 institutions conducted more than 15 trials across seven jurisdictions using six different currencies.
Despite these achievements, Chiong pointed out the limitations:
“No one has truly succeeded in achieving scale. Many promising use cases have yet to gain widespread industry adoption. Additionally, supporting infrastructure is needed for scalable solutions beyond individual networks.”
To facilitate large-scale deployment of tokenized assets, enhancements in liquidity, infrastructure, standardized frameworks, and shared settlement assets are essential, according to MAS.
A Master Plan for Commercialization
Initiated in 2022, Project Guardian supports increased liquidity through capital raising, secondary trading, and asset servicing and settlement, MAS reported.
Addressing infrastructure challenges, MAS’s Global Layer One—launched in 2023 with contributions from BNY Mellon, Citi, JPMorgan, MUFG, and Societe Generale-FORGE—is set to expand in 2024 with Euroclear and HSBC joining to refine principles and grow its ecosystem.
On November 4, Project Guardian’s industry group released two tokenization frameworks:
- Guardian Fixed Income Framework – integrates international standards and principles to guide the implementation of tokenization in debt capital markets.
- Guardian Funds Framework – outlines best practices for fund tokenization, including the Guardian Composable Token Taxonomy.
Enhancing Settlement with the SGD Testnet
The SGD Testnet will be launched to enable participants in Project Guardian and Project Orchid to access tokenized Singapore dollars for payments and securities settlements. Project Orchid has explored retail CBDC use cases and introduced “purpose-bound money,” a programmable form of currency, which will also be tested on the platform.
Once goals are met, commercialization becomes the next logical phase. Notably, mBridge launched its minimum viable product in October 2023.
