The Monetary Authority of Singapore (MAS) has unveiled a strategic initiative to accelerate the commercialization of asset tokenization, with new frameworks to guide industry adoption. The MAS's approach draws on learnings from recent projects, especially Project Guardian, which explored tokenization potential in foreign exchange and funds with over 40 financial institutions. Despite successful trials, MAS deputy managing director Leong Sing Chiong noted that broader industry traction is still lacking, along with the necessary infrastructure to support large-scale use.

To address these challenges, MAS plans to enhance liquidity, infrastructure, and introduce standardized frameworks for seamless settlements. MAS’s Project Guardian, launched in 2022, has already made strides in enhancing liquidity through activities like capital raising, trading, and asset servicing. With further collaboration from financial giants like BNY, Citi, JPMorgan, MUFG, and Societe Generale-FORGE, MAS’s Global Layer One infrastructure, launched in 2023, aims to lay down foundational principles to support tokenization.

The latest developments include two significant frameworks—the Guardian Fixed Income Framework, guiding debt capital markets’ tokenization, and the Guardian Funds Framework, establishing best practices for fund tokenization. Moreover, MAS will launch an SGD Testnet with Singapore’s digital dollar, facilitating transactions and settlements for Project Guardian and Project Orchid participants. The testnet will introduce a programmable digital currency, known as purpose-bound money, specifically tailored for transactions within this ecosystem.

As global financial institutions advance tokenization, MAS’s frameworks position Singapore as a leading innovator in digital asset infrastructure. With MBridge’s October 2023 minimum viable product release, the shift toward commercialized tokenization is gaining momentum, marking a pivotal moment in financial technology.