30s Summary

The Monetary Authority of Singapore (MAS) is pushing for the commercialization of asset tokenization and has already tested applications of tokenization in foreign exchange and funds through Project Guardian. However, challenges such as scale, industry traction, and infrastructure have been identified. To overcome these, MAS is working on solutions like liquidity, standardized frameworks, and common settlement assets. Initiatives like Global Layer One and SGD Testnet are expected to bolster infrastructure and provide platforms for experimentation. Lastly, mBridge will launch its minimum viable product for commercialization in October 2023.

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The Monetary Authority of Singapore (MAS) has announced their plans to push asset tokenization into the commercial mainstream. Various projects and frameworks have been used to create guidelines for this drive.

In a recent summit, Deputy Managing Director of MAS, Leong Sing Chiong, evaluated the progress of the large financial bodies involved in Project Guardian. This project has been testing the application of tokenization in foreign exchange and funds, with over 40 organizations conducting over 15 tests in seven different regions using six different currencies.

Despite these successes, Leong identified some limitations. These include issues with achieving scale, garnering traction throughout the industry, and accessing the necessary infrastructure to expand successful tokenized assets beyond individual networks. As part of their strategy to meet these challenges, MAS are working on solutions such as liquidity, infrastructure, standardized frameworks and common settlement assets.

Project Guardian, which began in 2022, is already increasing liquidity through capital raising, secondary trading and asset servicing and settlement. To further improve infrastructure, Global Layer One, a MAS project developed by financial powerhouses like BNY, Citi, JPMorgan, MUFG and Societe Generale-FORGE, plans to expand its reach in the coming year.

The Project Guardian industry group has also created two frameworks for implementing tokenization with a focus on integrating international standards and principles to guide debt capital market tokenization and understanding best practices for fund tokenization.

Lastly, the SGD Testnet, a platform to experiment with tokenized Singaporean money, will be accessible to participants in Project Guardian and Project Orchid.

Project Orchid, another initiative from MAS, is targeting the retail sector for CBDC (Central Bank Digital Currency) and has coined the idea of ‘purpose-bound money’ which will be tested on the testnet.

Rounding off the plans for commercialization, mBridge has announced its minimum viable product launch in October 2023.