The Monetary Authority of Singapore (MAS) has launched Project Guardian, a blockchain-based digital asset test that will use tokenization. The project will include regulated financial institutions that will act as “fiduciary anchors”, with a pilot involving JP Morgan, DBS Bank and Marketnode, SGX’s joint venture for bonds.
The Project Guardian initiative or Project Guardian, which was announced on Tuesday during the Asia Tech x Singapore summit, was spearheaded by Deputy Prime Minister and Coordinating Minister for Economic Policies, Heng Swee Keat. In the, MAS will explore decentralized finance (DeFi) applications in wholesale funding markets by establishing a liquidity pool of tokenized bonds and deposits to execute loans and borrowings on a public blockchain-based network.
According to MAS Fintech Director Sopnendu Mohanty, the lessons from Project Guardian will serve as a foundation to inform policy markets about the regulatory guardrails required to use DeFi while mitigating its dangers.
Both DBS and JPMorgan have experience developing digital assets and blockchain technology in their wholesale banking operations. Last year, DBS launched an $11 million digital bond security token offering (STO). Since its inception in 2020, JPMorgan’s Onyx digital asset network has completed more than $300 billion in transactions.
DBS Bank has been active in the cryptocurrency industry for a number of years, establishing its own institutional-grade cryptocurrency exchange in December 2020. The firm has been progressively enhancing the range of digital asset services supported on the exchange, with a cryptocurrency escrow solution set to debut in May 2021.
MAS has taken the lead in exploring the future of finance with DeFi protocols, becoming one of the few major regulators to do so. If successful, it could help Singapore consolidate its position as a world financial center.
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