The Monetary Authority of Singapore will soon expand its industry pilot initiative to include three other asset classes: asset and wealth management, fixed income and foreign exchange.
The move is an expansion of its ongoing Project Guardian initiative, which is currently looking to deepen the use of blockchain technology in the financial markets, Singapore’s central bank announced on 26 June.
Launched in May 2022, Project Guardian aims to explore the use of public blockchain technology to build open and interoperable networks that would enable digital assets to be traded across platforms and liquidity pools.
The pilot project for the three new areas will be overseen by the Project Guardian Industry Group, a new body set up by Singapore’s central bank.
The group comprises 11 financial institutions including HSBC, UBS, Shroders Investment Management and the Singapore Exchange Group.
The pilot for asset and wealth management will look at a range from digitalised products to tokenised investment vehicles.
For instance, UBS Asset Management is launching a pilot to explore the native issuance of a variable capital company (VCC) fund on digital asset networks, to enhance fund distribution and facilitate improved secondary market trading of VCC fund shares.
A VCC is a corporate structure for investment funds in Singapore.
Meanwhile, Schroders is working with Calastone, a global funds network, to explore the capabilities of a tokenised investment vehicle for VCCs. The vehicle seeks to facilitate the personalisation of investment solutions.
In the area of fixed income and foreign exchange, the pilots are in tokenised asset-backed securities, tokenised bonds and tokenised bank liabilities.
At present, DBS Bank, SBI Digital Asset Holdings and UBS are carrying out a pilot repurchasing agreement with natively issued digital bonds, while Standard Chartered and supply chain fintech firm Linklogis have developed an initial token offering platform to enable the issuance of asset-backed security tokens listed on SGX.
The Japan Financial Services Agency has also joined Project Guardian, making it the first overseas financial regulator to do so. This paves the way for them to collaborate on digital asset innovation and best practices for asset tokenisation.