Singapore’s central bank, the Monetary Authority of Singapore (MAS), announced earlier this week that it had penned a partnership with the financial services industry to launch what it called “Project Guardian.”
The financial institution described this project as “a collaborative initiative with the financial industry that seeks to explore the economic potential and value-adding use cases of asset tokenization” and decentralized finance (DeFi).
The announcement of the initiation of Project Guardian came from Heng Swee Keat, the deputy prime minister of Singapore, at the Asia Tech x Singapore Summit.
MAS noted: “The first industry pilot under Project Guardian will explore potential DeFI applications in wholesale funding markets,” adding:
“The pilot, led by DBS Bank Ltd., JP Morgan, and Marketnode, involves the creation of a permissioned liquidity pool comprising tokenized bonds and deposits.”
The financial institution continued: “The pilot aims to carry out secured borrowing and lending on a public blockchain-based network through execution of smart contracts.”
Monetary Authority of Singapore Monitoring Digital Asset Ecosystem Growth
Chief fintech officer at MAS Sopnendu Mohanty explained that the institution is “closely monitoring innovations and growth in the digital asset ecosystem and working through the potential opportunities and risks that come with new technologies — to consumers, investors, and the financial system at large.”
Mohanty further explained: “The learnings from Project Guardian will serve to inform policy markets on the regulatory guardrails that are needed to harness the benefits of DeFI while mitigating its risks.”
Commenting on the development, head of group planning and strategy at DBS Han Kwee Juan noted:
“DBS is pleased to lead the charge to explore potential digital assets and use of DeFI concepts that will enhance efficiency and scalability in trading, clearing, and settlement; while managing risks to financial stability and integrity.”
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