Regulatory ActionAnnouncedThe Monetary Authority Of Singapore (MAS) Announces Project Guardian
Milestone Date: May 31, 2022
The Monetary Authority of Singapore (MAS) has introduced Project Guardian, a pilot initiative focused on digital assets using tokenization on public blockchains. The project includes established financial institutions operating as “trust anchors.” One of the project’s initial pilots will involve tokenized foreign exchange and government bond transactions and includes participation from JP Morgan, DBS Bank, and Marketnode, a joint venture between the SGX Group and Temasek. SGX is Singapore’s stock exchange.
Using tokenized bonds and deposits, a controlled liquidity pool will facilitate DeFi transactions centered around borrowing and lending on a public blockchain. This solution is designed for institutional rather than retail investors; therefore, it’s only exclusively accessible within the wholesale market.
The MAS has expressed general support for blockchain technology, but it has concerns regarding the inherent risks linked to cryptocurrencies and advises against their ownership by retail investors. However, the authority does recognize the potential of tokenization, decentralized finance, and other blockchain-driven innovations to optimize a variety of existing financial business processes. MAS is eager to explore distributed ledger technology (DLT) in a more controlled environment, hence the launch of Project Guardian.
“Through practical experimentation with the financial industry and the broader ecosystem, we seek to sharpen our understanding in this rapidly transforming digital assets ecosystem,” said Sopnendu Mohanty, Chief FinTech Officer, MAS. “The learnings from Project Guardian will serve to inform policy markets on the regulatory guardrails that are needed to harness the benefits of DeFi, while mitigating its risks.”
By Elizabeth Morrison
Published:May 31, 2022
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