Singapore outlines design framework for interoperable networks in collaboration with financial firms

Pradipta Mukherjee

1 year ago

Esplanade Outdoor Theatre in Downtown Singapore city. Marina Bay area and lights show at night. Financial district and skyscraper buildings.

The Monetary Authority of Singapore (MAS), the city state’s central bank, has proposed a framework for designing open, interoperable networks for digital assets, developed jointly with the Bank for International Settlements and other financial institutions.

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“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. This is why we are actively collaborating with the industry to foster a responsible and innovative digital asset ecosystem,” Leong Sing Chiong, Deputy Managing Director of Markets and Development, at MAS, said in a statement on Monday.
MAS also announced an expansion of Project Guardian to test the potential of asset tokenization across more financial asset classes. The central bank has enlisted 11 financial institutions, including banking giants Citi, HSBC, DBS, Standard Chartered, which will lead industry pilots in asset and wealth management, foreign exchange, and fixed income.
Citi, for instance, is testing the pricing and execution of digital asset trades on a distributed ledger, MAS said.
Standard Chartered and Linklogis are working on an initial token offering platform to enable the issuance of asset-backed security tokens listed on the Singapore Exchange.

SBI Digital Asset Holdings, UBS AG and DBS Bank are developing a pilot repurchasing agreement (repo) with natively issued digital bonds, MAS said. The initiative is aimed at increasing efficiency for cross-border distribution and settlement of capital market instruments on digital asset networks.

Japan Financial Services Agency (JFSA) has also come onboard as the first overseas financial regulator to join Project Guardian, MAS said. JFSA and MAS will work on digital asset innovation for asset tokenization while safeguarding against risks to financial stability and integrity.

Last week, MAS released a whitepaper for “purpose-bound” money, detailing a technical overview of digital currencies designed for specific purposes. The whitepaper was developed in collaboration with Banca d’Italia, Bank of Korea, International Monetary Fund, Amazon, DBS Bank, Onyx by J.P. Morgan and other industry players.