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Singapore's Central Bank Ramps Up Efforts to Lead the Way in Asset Tokenization

This move positions Singapore as a frontrunner in exploring the potential of this transformative technology.

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The Monetary Authority of Singapore (MAS) has announced a major expansion of its Project Guardian initiative, aiming to accelerate the adoption of asset tokenization across financial services.

Previously focused on collaborations with individual financial institutions, Project Guardian is now welcoming major industry associations like the Global Financial Markets Association (GFMA) and the International Swaps and Derivatives Association (ISDA), according to an announcement on Thursday.

This broader collaboration will establish common standards for tokenizing various asset classes, including fixed income, foreign exchange, and wealth management products, MAS said.

The central bank is setting up three workstreams – fixed income, FX, asset and wealth management – to foster the development of standards and frameworks across key asset classes.

Global Layer One (GL1)

In addition to industry-wide collaboration, MAS also announced the successful completion of the first phase of the Global Layer One (GL1) initiative.

This initiative, co-developed with international financial institutions, aims to develop standards, market practices and governing principles of foundational digital infrastructure for tokenised assets. A robust GL1 would facilitate seamless cross-border transactions while ensuring compliance with regulations across various jurisdictions, according to a whitepaper, also published on Thursday.

MAS is working with international policymakers and financial institutions including BNY, Citi, J.P. Morgan, MUFG Bank, Ltd., and Societe Generale-FORGE (SG Forge) under the GL1 initiative

"The GL1 initiative is an important next step to realise the potential of asset tokenisation and reap efficiencies in capital markets. Such public-private partnerships are fundamental to ensure financial infrastructures continue to serve the needs of market participants and consumers, while maintaining market integrity and financial stability," Leong Sing Chiong, deputy managing director for markets and development, MAS, said

 In the next phase, GL1 will explore the establishment of a non-profit organisation (GL1 Org) to develop common principles, policies and standards for operating a global shared ledger infrastructure.