Singapore’s central bank, the Monetary Authority of Singapore (MAS), has initiated “Project Guardian” in collaboration with the Bank for International Settlements (BIS) and other financial institutions to investigate the development of open and interoperable networks for tokenized digital assets. With participation from 11 institutions, including HSBC, Standard Chartered, DBS, and Citi, pilot studies across various financial asset classes such as wealth management, fixed income, and foreign exchange will be conducted.
Standard Chartered, for example, is actively involved in the initiative, working on an initial token offering platform in partnership with payments platform Linklogis. Their aim is to issue asset-backed security tokens listed on the Singapore Exchange, exploring the potential benefits of tokenization for financing real-world economic activity. The successful completion of initial pilot trades conducted with Singapore Exchange and Linklogis will demonstrate the viability and innovation of asset-backed tokenization.
MAS’s Stance on Crypto and the Push for Global Interoperability
While Singapore’s central bank remains cautious about the crypto ecosystem and actively discourages speculation in cryptocurrencies, it recognizes the value creation and efficiency gains that can be derived from the digital asset ecosystem. In line with this perspective, MAS is committed to exploring the use of digital money, including central bank digital currencies (CBDCs) and stablecoins, proposing standards to govern their implementation.
MAS’s efforts to establish new standards within the country align with broader international initiatives, such as those led by the International Monetary Fund (IMF). The IMF aims to create a platform for central bank digital currencies (CBDCs) to facilitate cross-border transactions. It urges central banks to collaborate and agree on a common regulatory framework for digital currencies to enable global interoperability, emphasizing that failure to do so may lead to the dominance of cryptocurrencies. Unlike cryptocurrencies, CBDCs are centrally controlled digital currencies.
Currently, approximately 114 central banks worldwide are exploring CBDCs, with around 10 having made significant progress. The IMF highlights that domestic deployment of CBDCs may limit their potential, as they have the capacity to promote financial inclusion and reduce the cost of remittances. Noting that the average cost of money transfers amounts to 6.3% or USD 44 billion annually, the IMF recommends backing CBDCs with assets to enhance their stability. Furthermore, the IMF acknowledges that cryptocurrencies can be considered investment opportunities when backed by assets but warns against speculative investments without asset backing.
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