The Monetary Authority of Singapore (MAS) is working with the financial industry to expand asset tokenisation initiatives and develop foundational capabilities to scale tokenised markets.
These developments under Project Guardian will catalyse the institutional adoption of digital assets, with the aim of freeing up liquidity, unlocking investment opportunities, and increasing the efficiency of financial markets.
In response to strong interest from the funds industry, the MAS is launching a new funds workstream within the Project Guardian industry group focused on the native issuance of Variable Capital Company (VCC) funds on digital asset networks.
This workstream aims to address tax, policy and legal considerations while increasing distribution channels for asset managers. MAS will collaborate with the Accounting and Corporate Regulatory Authority to better assess the opportunities and risks of adopting digitally native VCC fund shares.
The MAS is also collaborating with international policymakers and financial institutions (FIs) including BNY Mellon, DBS, JP Morgan and MUFG to explore the design of an open, digital infrastructure that will host tokenised financial assets and applications.
This new initiative, called Global Layer One, will facilitate seamless cross-border transactions and enable tokenised assets to be traded across global liquidity pools, while meeting relevant regulatory requirements and guidelines.
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Concurrently, the MAS is developing an Interlinked Network Model (INM), which will serve as a common framework for exchanging digital assets across independent networks. This enables FIs to transact with each other without the need for all of them to be on the same network. A whitepaper detailing how INMs may be applied in practice and the design considerations titled “Interlinking Networks” has been published on the MAS website.
The MAS has also welcomed the International Monetary Fund (IMF) staff to Project Guardian’s policymaker group which comprises policymakers from Japan, Singapore, Switzerland and the UK.
IMF will provide an international perspective on the policies and legal issues that would facilitate cooperation around cross-border platforms and preserve the stability of the international monetary system.
