MAS Seeks Greater Momentum Towards Tokenization in Financial Services

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Sujha Sundararajan

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Sujha Sundararajan

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November 4, 2024 07:45 EST

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The Monetary Authority of Singapore (MAS) has revealed plans to advance asset tokenisation in financial services. The central bank of the island nation aims to support its commercialisation by introducing new measures.

Unveiled on Monday, MAS would form commercial networks to deepen the liquidity of tokenised assets as its initial plan. Under Project Guardian, MAS has successfully carried out industry trials on the use of asset tokenisation in capital markets.

Further, financial giants like Citi, HSBC, Schroders, Standard Chartered and UOB have formed the Guardian Wholesale Network industry group. The group aims to establish a multi-member network to commercialise their respective asset tokenisation trials.

Secondly, the central bank would develop an ecosystem of market infrastructures in a move to facilitate seamless cross-border transactions.

MAS already launched the Global Layer One (GL1) initiative to drive the development of digital infrastructures for commercial networks. To expand its scope, the GL1 will take on additional activities such as governance and risk control alignments.

Besides, MAS is also focused on fostering industry frameworks for tokenised asset implementation and enabling access to common settlement facility.

Leong Sing Chiong, MAS deputy managing director, said the regulator has seen “strong interest” in asset tokenization in recent years. The interest is specifically for fixed income, FX and asset management, he added in an opening speech at the Layer One Summit on Monday.

“We are encouraged by the keen participation from financial institutions and fellow policymakers to co-create industry standards and risk management frameworks to facilitate commercial deployment of tokenized capital markets products, and scale tokenized markets on an industry-wide basis.”