The Monetary Authority of Singapore (MAS) has partnered with major banks and financial services firms to explore uses of asset tokenization and decentralized finance (defi). DBS Bank and JPMorgan will pilot the first project.

Project Guardian started

The Monetary Authority of Singapore (MAS), the country’s central bank, announced on Tuesday that it has partnered with the financial services industry to launch Project Guardian. The central bank described Project Guardian as “a collaborative initiative with the financial industry looking to explore the economic potential and value-added use cases of asset tokenization” and decentralized finance (defi).

Heng Swee Keat, Singapore’s Deputy Prime Minister and Coordinating Economic Policy Minister, announced the launch of Project Guardian at the Asia Tech x Singapore Summit on Tuesday.

“The first industrial pilot under Project Guardian will explore potential Defi applications in the wholesale finance markets,” explained the MAS, adding:

The pilot, led by DBS Bank Ltd., JP Morgan and Marketnode, involves the creation of an approved liquidity pool of tokenized bonds and deposits.

“The pilot project aims to perform secured lending and lending on a public blockchain-based network through the execution of smart contracts,” the MAS continued.

Sopnendu Mohanty, Chief Fintech Officer at the Central Bank, explained that the MAS “closely monitors innovation and growth in the digital asset ecosystem, going through the potential opportunities and risks that come with new technologies – for consumers, investors and the financial system at large. “

He noted, “Insights from Project Guardian will serve to inform policy markets about the regulatory guard rails needed to reap the benefits of Defi while mitigating its risks.”

Han Kwee Juan, Head of Group Planning and Strategy at DBS, Southeast Asia’s largest bank, commented:

DBS is pleased to assume responsibility for exploring potential digital assets and leveraging defi concepts that will improve efficiency and scalability in trading, clearing and settlement; in dealing with risks to financial stability and integrity.

What do you think of this initiative? Let us know in the comment section below.

Kevin Helms

As an Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the interface between economics and cryptography.

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