The Monetary Authority of Singapore (MAS) has unveiled a plan to support asset tokenization in financial services, aiming to make traditional markets more transparent, efficient, and accessible.
What is Asset Tokenization?
Asset tokenization involves converting real-world assets into digital tokens recorded on a blockchain. Each token represents a portion of the asset that can be traded securely and transparently. This approach promises improved liquidity and faster transactions, especially in financial services where securities like bonds and stocks become more accessible and tradable on digital platforms.
Key Focus Areas of MAS’s Initiative
MAS has outlined goals to advance asset tokenization, focusing on commercial networks, market infrastructure, and industry standards. The Guardian Wholesale Network, involving financial institutions like Citi and HSBC, aims to commercialize asset tokenization trials. Over 40 institutions are engaged across multiple jurisdictions through this project.
Common Infrastructure and SGD Testnet Network
MAS launched the Global Layer One (GL1) initiative for digital infrastructure supporting cross-border transactions, developed with banks like BNY Mellon and Citi. It aims to establish universal standards. The SGD Testnet allows issuance and settlement of Singapore's central bank digital currency, with institutions like DBS and OCBC participating.
MAS's announcement coincides with the upcoming Singapore Fintech Festival 2024, where experts will discuss the role of new technologies, including tokenization, in financial sector innovation.
