Singapore Unveils Frameworks to Promote Tokenized Assets in Finance
Singapore is enhancing its financial sector by promoting tokenization through new frameworks aimed at broader adoption. The Monetary Authority of Singapore (MAS) has unveiled plans to advance the use of tokenized assets, focusing on fixed income, foreign exchange (FX), and asset management.
MAS introduced two key frameworks to guide the acceptance and implementation of tokenized assets. These initiatives include building commercial networks to improve liquidity, developing infrastructure for tokenized markets, and establishing industry standards along with shared settlement facilities. Leong Sing Chiong, MAS's deputy managing director, noted the growing interest in asset tokenization, emphasizing collaboration among financial institutions and policymakers to create standards and frameworks for large-scale growth in tokenized capital markets.
Project Guardian, MAS's crypto industry group, released guidelines to assist financial institutions in implementing tokenization. This initiative comprises 40 members, including financial institutions, industry bodies, and international regulators from seven regions. It published two major frameworks: one for fixed income and another for funds.
The Guardian Fixed Income Framework provides guidelines for utilizing tokenization in debt markets, aiming to enhance capabilities and foster the adoption of tokenized debt products. The Guardian Funds Framework outlines best practices for creating tokenized funds, including recommendations for multi-asset tokenized investment vehicles. Through these frameworks, Singapore aims to lead in the commercialization of tokenized assets, establishing a solid foundation for future growth in digital finance.