On June 21, the Monetary Authority of Singapore (MAS) launched a report proposing standards for the use of digital assets and Distributed Ledger Technology (DLT) based networks. Called Project Guardian, the framework aims to advance best practices and technical standards among industries to better understand the potential opportunities, risks, and limitations of these networks as Financial Market Infrastructures (FMI). The framework also calls for the establishment of open and interoperable networks as design options to enable the trading of digital assets across networks and liquidity pools. Furthermore, the report endeavors to provide cooperation among the private and public sectors towards safe and efficient FMIs anchored on international standards for payment systems, central securities depositories, securities settlements, central counterparties, and trade depositories. Under this project, MAS is already collaborating with 11 partners, including large financial institutions, to test the tokenization of assets in categories such as wealth management, fixed income, and foreign exchange.
The report comes as Singapore financial institutions and fintech companies take proactive steps toward the use of digital assets. The digital monies covered under the report include central bank digital currencies (CBDCs), tokenized bank deposits, and potentially well-regulated stable coins, and the report also provides a technical overview of Purpose Bound Money (PBM). While the central bank still cautions against cryptocurrencies, it has acknowledged the potential value for creation and efficiency gains in the digital asset economy. Project Guardian builds on MAS’ 2021 Project Orchid, which further examines the technology infrastructure and technical competencies needed for a CBDC system in Singapore. MAS also announced that it has named Deputy Prime Minister and Minister of Finance Lawrence Wong as the next Chairman of its Board of Directors beginning on July 8, 2023.
