Standard Chartered Bank is leading a Monetary Authority of Singapore (MAS) initiative to explore the issuance of tokens linked to trade finance assets, launched under the regulator’s Project Guardian.
The pilot project aims to digitize the trade distribution market, by transforming trade assets into transferable instruments that are more transparent and accessible to investors, MAS said in an announcement on Wednesday.
Tokenization and the adoption of blockchain technology has been a focus area for the industry, which hopes to bring more liquidity into trade finance and simplify the process for trading through smart contracts.
“Digital assets are here to stay, and we see its potential to play a greater role in supporting the real economy. By transforming trade assets into transferable instruments, we aim to improve the accessibility to an asset class – which has largely been the domain of banks – with participation from a broader range of investors,” Kai Fehr, global head of trade and working capital, Standard Chartered, said in notes shared with Blockhead.
DeFi pilot goes live
Yesterday, MAS also announced that the first industry pilot under MAS’ Project Guardian that explores potential decentralised finance (DeFi) applications in wholesale funding markets had completed its first live trades.
DBS Bank, JP Morgan and SBI Digital Asset Holdings conducted foreign exchange and government bond transactions against liquidity pools comprising of tokenised Singapore Government Securities Bonds, Japanese Government Bonds, Japanese yen and Singapore dollar.
“The live pilots led by industry participants demonstrate that with the appropriate guardrails in place, digital assets and decentralised finance have the potential to transform capital markets. This is a big step towards enabling more efficient and integrated global financial networks. Project Guardian has deepened MAS’ understanding of the digital asset ecosystem and has contributed to the development of Singapore’s digital asset strategy,” Sopnendu Mohanty, MAS chief fintech officer, said.