The Monetary Authority of Singapore (MAS) has collaborated with 11 financial institutions to explore infrastructure models that would facilitate tokenized asset trading.
The MAS's Project Guardian report, released on June 26, emphasized the importance of open and interoperable digital asset networks in unlocking the full potential of asset tokenization. The report examined three use cases, including over-the-counter (OTC) foreign exchange transactions, trade finance, and OTC-structured notes.
The first use case was over-the-counter (OTC) foreign exchange transactions.
It concluded:
“Trading in a permissioned liquidity pool protocol achieves greater efficiency by reducing friction and minimising risks, while the tokenised assets bring the benefits of atomic settlement.”
The second use case was trade finance and focused on asset-backed securities tokenization. In this model, tokenized trade finance receivable assets are repackaged as natively issued fungible tokens and divided into two tranches with differing risk exposures.
The third use case was OTC-structured notes, which are “a popular wealth management product with substantial traction and demand in Asian wealth centres.
Project Guardian was launched in May 2022. It will continue to examine “other focused themes of Trust Anchors and Institutional DeFi.”
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Policy and Regulation
