The Monetary Authority of Singapore (MAS) has launched Project Guardian, a blockchain-based digital asset trial that will use tokenization. The project will include regulated financial institutions as “trust anchors”, with a pilot involving JPMorgan Chase, DBS Bank and SGX bond joint venture Marketnode.
The Project Guardian initiative was announced on the sidelines of the Asia Tech x Singapore Summit on Tuesday and is spearheaded by Deputy Prime Minister and Coordinating Minister for Economic Policy Heng Swee Keat. it will see MAS explore Decentralized Finance (DeFi) Applications Perform lending and borrowing on a public blockchain-based network by building liquidity pools of tokenized bonds and deposits.
According to MAS Chief FinTech Officer Dr. Sopnendu Mohanty, the lessons from Project Guardian will serve as the basis for informing the policy market about the regulatory guardrails needed to use DeFi while mitigating its harm.
Both DBS and JPMorgan have experience developing digital assets and blockchain technology in their wholesale banking businesses. Last year, DBS launched a $11 million digital bond in a security token offering (STO). JPMorgan’s Onyx digital asset network has completed more than $300 billion in transactions since its inception in 2020.
DBS has been active in the cryptocurrency industry for years, building its own Institutional Cryptocurrency Exchange December 2020. The company has been gradually expanding the range of digital asset services supported by the exchange, Crypto Trust Solutions Premiering in May 2021.
MAS has pioneered exploring the future of finance through DeFi protocols, becoming one of the few major regulators to do so. If successful, it could help Singapore cement its position as a global financial center.