Singapore’s Monetary Authority (MAS) is embarking on a collaborative effort with financial authorities in Europe and Japan to bolster cross-border cooperation in the realm of digital assets and tokenization.
Officially announced on October 30th, MAS is forging partnerships with the Financial Services Agency of Japan (FSA), the Swiss Financial Market Supervisory Authority (FINMA), and the United Kingdom’s Financial Conduct Authority (FCA) to advance joint digital asset pilot projects. The initiative is set to focus on areas such as fixed income, foreign exchange, and asset management products.
This new endeavor is an extension of Singapore’s ongoing asset tokenization initiative, dubbed Project Guardian, which was launched in 2022. In the earlier phases of Project Guardian, Singapore’s central bank collaborated with 15 financial institutions to conduct pilot tests in asset tokenization. These pilot tests showed substantial promise in terms of transaction efficiency.
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Recognizing the need for increased cross-border coordination as these pilot projects scale up and become more sophisticated, the MAS has established a Project Guardian policymaker group that includes the FSA, FCA, and FINMA. The group’s main objectives are to facilitate policy and accounting discussions, identify potential risks and regulatory gaps related to digital assets and tokenized solutions, and explore the establishment of common standards for designing digital asset networks, while also seeking best practices across various jurisdictions. Other focus areas include interoperability, regulatory sandboxes, and education initiatives within the digital currency industry.
MAS’s Deputy Managing Director of Markets and Development, Leong Sing Chiong, emphasized the significance of the collaboration with FSA, FCA, and FINMA, emphasizing a shared desire among policymakers to gain deeper insights into the opportunities and challenges arising from digital asset innovation. Through this collaboration, MAS intends to drive the development of common standards and regulatory frameworks that will support cross-border interoperability and sustainable growth of the digital asset ecosystem.
Singapore has maintained an active role in global financial authorities’ efforts within the digital currency domain. Notably, in September 2023, MAS conducted a joint test with the Bank for International Settlements and the central banks of France and Switzerland for cross-border trading and settlement of wholesale central bank digital currencies, reinforcing its position as a key player in the evolving digital currency landscape.
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