Singapore’s Regulator To Investigate Blockchain Applications

On Tuesday, Singapore’s Monetary Authority (MAS) said that it would investigate use cases for decentralized finance (DeFi) on public blockchains.

The effort, known as Project Guardian, will work with financial industry partners such as JPMorgan, Marketnote, and DBS to study the “economic potential and value-adding use cases of asset tokenization.”

Tokenization is “the process of digitally expressing assets or items of value through a smart contract on a blockchain,” according to MAS. This allows high-value financial and real-economy assets to be fractionalized and traded on a peer-to-peer (P2P) basis through the internet.”

In addition, Project Guardian will put asset tokenization and DeFi to the test by creating experimental use cases in four areas: open interoperable networks, asset tokenization, trust anchors, and institutional grade DeFi protocols.

The initiative’s initial pilot, led by financial industry partners, involves the creation of a permissioned liquidity pool. This will be made up of tokenized bonds and deposits that will be used to conduct secured borrowing and lending on a https://optimisus.com/public blockchain, with smart contracts executing the transactions.

“Developed on a public blockchain, this pilot is also important because it advances efforts to innovate, advance, and scale institutional financial applications on blockchain, and their interoperability across different blockchain networks with existing financial markets’ long-established rails.”

In a statement, Han Kwee Juan, group head of planning and strategy at DBS, said, “We believe that these early investigations in DeFi solutions will ensure Singapore’s competitiveness and relevance as a cutting-edge financial centre.”