The Monetary Authority of Singapore (MAS) is collaborating with financial powerhouses DBS, JPMorgan (JPM), and Marketnode to launch a pilot program that will investigate potential applications of digital assets in tokenization and decentralized finance (DeFi).
- According to the announcement made by Singapore’s central bank on Tuesday, the project will investigate the viability of tokenization and DeFi by making use of open, interoperable networks. This will make it possible for digital assets to be traded across platforms, including those that already exist in the financial industry.
- During the initial phase of “Project Guardian,” the MAS will investigate the use of distributed finance technologies in wholesale funding markets. This will be accomplished by the establishment of a liquidity pool consisting of tokenized bonds and deposits, which will be used to carry out borrowing and lending activities on a public blockchain-based network.
- Both DBS and JPMorgan have proven histories of integrating blockchain technology and digital assets into their wholesale banking operations. DBS is a subsidiary of JPMorgan Chase.
- During a security token offering one year ago, DBS issued a digital bond with a face value of S$15 million (US$11.3 million) (STO). Since its introduction in 2020, the JPMorgan Onyx Digital Assets Network, which facilitates trading in fixed income markets through the utilization of tokens, has now executed more than $300 billion worth of transactions.
- Building on these advancements while coordinating with the central bank of a major financial center may give additional push for mainstream financial institutions to adopt digital assets and blockchain technology.