Singapore to explore digital asset licensing on public chains

The Monetary Authority of Singapore (MAS) has launched Project Guardian, a blockchain-based trial for digital assets that will use tokenization. The project will involve regulated financial institutions serving as “trust anchors”, with a pilot involving JP Morgan, DBS Bank and Marketnode, the SGX joint venture for bonds.

The initiative of Project Guardian, which was announced at the Asia Tech x Singapore Summit on Tuesday, was led by Deputy Prime Minister and Coordinating Minister for Economic Policy Heng Swee Keat. It will see MAS explore decentralized finance (DeFi) applications in wholesale finance markets by setting up a liquidity pool of tokenized bonds and deposits to carry out loans and lending on a public blockchain-based network.

According to MAS Chief Fintech Officer, Dr. Sopendu Mohanty, lessons from Project Guardian will serve as a basis for informing policy makers about the regulation of the guardrails required to use DeFi, while also reducing the dangers.

Both DBS and JPMorgan have experience in developing digital assets and blockchain technology in their wholesale banking operations. Last year, DBS launched a $ 11 million digital bond in a security token (STO) offering. Since its inception in 2020, JPMorgan’s Onyx Digital Assets Network has completed more than $ 300 billion in transactions.

Related: Singapore intends to streamline the authority of financial watchdog over crypto companies

DBS Bank has been active in the cryptocurrency industry for several years, and established its own institutional quality crypto exchange in December 2020. 2021

MAS has taken the lead in exploring the future of finance with DeFi protocols, and became one of the few major supervisors to do so. If successful, it could help Singapore cement its position as a global financial center.