The Monetary Authority of Singapore (MAS), together with financial heavyweights DBS, JPMorgan (JPM) and Marketnode, is launching a pilot project to explore use cases for tokenization and decentralized finance (DeFi) in digital assets.
- The project will explore the feasibility of tokenization and DeFi using open, interoperable networks that enable trading of digital assets across different platforms, including existing financial infrastructure, the Singapore central bank announced Tuesday.
- In the first phase of "Project Guardian," MAS will explore DeFi applications in wholesale funding markets by creating a liquidity pool of tokenized bonds and deposits to conduct borrowing and lending through a public blockchain-based network.
- Both DBS and JPMorgan have a proven track record of integrating digital assets and blockchain technology into their wholesale operations.
- A year ago, DBS issued a S$15 million (US$11.3 million) digital bond through a security token offering (STO). JPMorgan's Onyx Digital Assets Network, which uses tokens to trade fixed income securities, has completed more than US$300 billion worth of transactions since its launch in 2020.
- Expanding these developments in step with a major financial center's central bank could give momentum to the adoption of digital assets and blockchain by established financial institutions.