Bank of Singapore Proposes Framework for Interoperable Digital Asset Network

Establishing an open and interoperable network

Singapore’s central bank, the Monetary Authority of Singapore (MAS), today released a report proposing how to design a network to facilitate tokenized digital asset trading.

The report was produced in collaboration with the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements (BIS) as part of Project Guardian, a public-private partnership initiative on digital assets launched by MAS in May 2022. Contributions from DBS Bank, JP Morgan, HSBC, SBI Digital Asset Holdings, Standard Chartered and UOB are included.

Project Guardian aims to promote industry best practices and technical standards to prevent market fragmentation as digital assets and decentralized protocols proliferate, while also exploring the role of regulators.

Entitled “Enabling Open and Interoperable Networks,” the report provides a framework for designing open and interoperable digital asset networks based on tokenized real economic and financial assets. Introducing. Also, real-life case studies and example solutions were presented to illustrate the concept of the network.

One of them tested the utility of tokenized assets and liquidity pool protocols in over-the-counter forex trading conducted by Southeast Asia’s largest DBS Bank and Japan’s SBI Digital Asset Holdings. Other examples were presented of tokenization of asset-backed securities in trade finance and tokenization of over-the-counter structured bonds.

MAS argues that the true value in the digital asset ecosystem is the digital representation of the real economy and financial assets through tokenization, facilitating the provision of efficient, accessible and affordable financial services. there is

Project expansion

MAS also announced today the expansion of Project Guardian to explore the potential for asset tokenization across more financial asset classes. To support this effort, the company will form a Project Guardian industry group of 11 financial institutions to lead industry pilots in wealth management, fixed income and foreign exchange.

The pilot program includes projects such as:

• Digital structured notes and tokenized investment products
• Issuance of Digital Native VCC (Variable Capital Company) Fund
• Tokenized Asset-Backed Securities, Tokenized Bonds, Tokenized Bank Debt
• Repo trading using digital bonds
• Pricing and execution testing of digital asset transactions

MAS, which is actively working to promote the tokenization of assets, also just last week released a white paper on a common protocol that can be used for central bank digital currencies (CBDCs), tokenized bank deposits, stablecoins, and more.

connection:Singapore central bank announces common protocol for CBDC and stablecoins

Financial Services Agency also participates

MAS also announced that Japan’s Financial Services Agency (FSA) would be the first foreign financial regulator to join Project Guardian.

MAS Deputy Managing Director Leong Sing Chiong, in charge of market development, is negative about the speculation of crypto assets (virtual currencies), but sees “the potential for value creation and efficiency” in the ecosystem. We are actively working with the industry to foster a responsible and innovative digital asset ecosystem.”

He also said that as the project enters a new phase, he looks forward to working with the Financial Services Agency across public and private sectors to support the ecosystem’s global efforts.

The Financial Services Agency announced on the 26th that it will participate in Project Guardian as an observer. The purpose of the project is to “verify the feasibility of utilizing digital technologies such as asset tokenization through pilot experiments while managing risks related to financial stability and fairness.”

Mamoru Yanase, Counselor of the Financial Services Agency’s Policy Bureau, commented as follows on participating in the project.

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