The Monetary Authority of Singapore (MAS) has announced a global tokenization initiative that seeks to allow tokenized assets to be exchanged by different financial institutions across borders. The initiative, touted by MAS officials as the evolution of Project Guardian, a series of tokenization pilots carried by the institution, has the support of banking powerhouses like BNY Mellon, DBS, JPMorgan, and MUFG.
Monetary Authority of Singapore Announces Global Layer One Tokenization Project
The Monetary Authority of Singapore (MAS) announced Global Layer One (Gl1), an initiative to integrate global tokenization activities under one interconnected network. The project, which has the involvement and support of banking behemoths like BNY Mellon, DBS, JPMorgan, and MUFG, seeks to “facilitate seamless cross-border transactions and enable tokenized assets to be traded across global liquidity pools, while meeting relevant regulatory requirements and guidelines.”
The MAS announcement also establishes that the amalgamation of public and private companies in this project will ensure that the digital structures resulting from this initiative will comply with international standards and regulations.
GL1’s network is being presented as an evolution of Project Guardian, a series of initiatives exploring the future of tokenization in financial markets.
MAS Deputy Managing Director of Markets and Development Leong Sing Chiong stated that while Project Guardian has “successfully demonstrated that tokenized financial assets such as fixed income, foreign exchange and asset management products can be traded, distributed, and settled seamlessly across borders,” there is a need for a scalable infrastructure “to fully realize the potential of tokenized markets, and achieve network effects.”
Interconnected Tokenization Networks and More Pilots
In addition, the authority also announced the concept of an Interlinked Network Model (INM), a protocol to allow financial institutions and banks to exchange and transfer tokenized assets even if they are not present in the same network. A whitepaper detailing architecture considerations and implementation advice is already available publicly.
As part of Project Guardian, the authority announced five more pilots involving different use cases with several industry giants.
Citi, T. Rowe Price Associates, Inc., and Fidelity International are testing a bilateral digital assets trade mechanism. BNY Mellon and OCBC are piloting a solution for cross-border FX payment across different networks. Ant Group is experimenting with a global liquidity management solution to allow worldwide multicurrency clearing and settlements.
Also, Franklin Templeton is exploring tokenizing money market funds using digital assets for shares. JPMorgan and Apollo are working on an asset management suite using digital assets to reduce manual processes.
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