On 4 November 2024, the Monetary Authority of Singapore announced a strategic initiative to accelerate the commercialisation of asset tokenisation within the financial sector, with plans to establish foundational infrastructure, deepen liquidity, and develop industry frameworks. This move is part of Singapore’s broader effort to position itself as a leader in the digital finance space, with the initiative becoming effective immediately.
MAS’s announcement is backed by Project Guardian, an industry consortium involving more than 40 financial institutions, industry associations, and international policymakers. Since its inception, Project Guardian has conducted over 15 industry trials in six currencies, examining asset tokenisation’s role across multiple financial products. In light of these trials, MAS aims to create coordinated networks that connect various market participants and currencies, thereby enhancing capital raising, trading, and settlement processes for tokenised assets. Institutions such as Citi, HSBC, Schroders, Standard Chartered, and UOB have already formed the Guardian Wholesale Network to establish a multi-member network for commercialising their respective tokenisation projects.
Alongside these efforts, MAS has also progressed on the Global Layer One (GL1) initiative, launched in 2023 to develop essential digital infrastructure. This foundational platform aims to enable seamless cross-border transactions by aligning governance, risk management, and compliance controls for tokenised assets. Key global financial players—BNY Mellon, Citi, J.P. Morgan, MUFG, and Societe Generale-FORGE—are involved in defining these standards, with new participants like Euroclear and HSBC joining to support GL1’s scope expansion. This expanded scope seeks to ensure that tokenised assets can operate efficiently across different jurisdictions and systems by establishing standards for market infrastructure interoperability.
MAS is also working to facilitate broader acceptance of tokenisation through two new industry frameworks. The Guardian Fixed Income Framework (GFIF) offers a guide to tokenisation within debt capital markets, while the Guardian Funds Framework (GFF) provides recommendations for best practices in creating tokenised investment funds. These frameworks are intended to support institutions as they adopt tokenised solutions across various asset classes by standardising the processes and principles involved.
A significant component of MAS’s initiative is the introduction of a Common Settlement Facility for tokenised assets, including a test network for S$ wholesale central bank digital currency (CBDC). Known as the SGD Testnet, this facility will enable financial institutions to settle transactions in tokenised assets through a regulated digital currency. The test network includes features for programmability and interoperability, allowing it to connect with existing financial infrastructures. The initial phase involves institutions like DBS, OCBC, Standard Chartered, and UOB, which will test use cases in payments and securities settlements.
MAS’s Deputy Managing Director, Mr. Leong Sing Chiong, noted the strong industry interest in asset tokenisation, particularly in fixed income and foreign exchange. He emphasized MAS’s goal of establishing standards and frameworks that can facilitate the scalable deployment of tokenised financial products, contributing to the evolution of Singapore’s capital markets.
