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In a groundbreaking move set to redefine the financial landscape, the Monetary Authority of Singapore (MAS) made a resounding declaration on November 15, 2023. MAS unveiled five additional industry pilots under Project Guardian. Blockchain application development stands as the foundation of this initiative's success. 17 financial institutions within Project Guardian have launched five new industry pilots to explore innovative asset tokenization use cases. They represent a bold step forward in the quest to fortify the foundational capabilities essential for the exponential scaling of tokenized markets.
Key Focus Areas of Financial Institutions
The five asset tokenization pilots can potentially transform various segments of the capital markets value chain. They encompass listing, distribution, trading, settlement, and asset servicing. Out of the 17 financial institutions that are members of Project Guardian, the following financial institutions are working on:
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- Citi, T. Rowe Price Associates, Inc., and Fidelity International are actively testing institutional-grade mechanisms. These mechanisms are designed to price and execute bilateral digital asset trades efficiently. Their focus extends to the exploration of real-time post-trade reporting and analytics for digital asset transactions.
- Franklin Templeton is delving into the issuance of a tokenized money market fund utilizing a Variable Capital Company (VCC) structure. This innovative approach utilizes digital asset networks to maintain transparent records of fund shares.
- BNY Mellon and OCBC are testing a cross-border FX payment solution. This solution aims to facilitate secure and interoperable payments across diverse networks.
- Ant International is piloting a treasury management solution to strengthen global liquidity management funding. This innovative solution utilizes their global treasury hub based in Singapore to facilitate instantaneous multi-currency clearing and settlement. Their global treasury hub is situated in Singapore and it can accommodate transactions across a spectrum of over 40 currencies.
- Collaboratively, J.P. Morgan and Apollo are utilizing digital assets to streamline investment and management processes for discretionary portfolios and alternative assets. Their focus includes automated portfolio rebalancing and customization at scale. They aim to drastically reduce time consumption and manual processes associated with asset servicing.
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Conclusion
Apart from the five ongoing pilots, MAS unveiled Global Layer One, a project aimed at investigating the creation of an open digital infrastructure tailored for hosting tokenized financial assets and applications. Additionally, in collaboration with the financial sector, the central bank is spearheading the development of an Interlinked Network Model. This model is set to function as a unified framework facilitating the exchange of digital assets among financial institutions operating across independent networks.
Furthermore, MAS disclosed the participation of the International Monetary Fund (IMF) as one of the policymakers contributing to Project Guardian's initiatives.
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