JPMorgan Chase, DBS Bank, SBI, Standard Chartered Bank, HSBC, and UOB Are Among the Financial Institutions That Are Taking Part in the Digital Asset Pilots Being Conducted By MAS
The Monetary Authority of Singapore (MAS), Singapore's central bank, announced on Wednesday that "the first industry pilot under the MAS' Project Guardian that explores potential decentralized finance (defi) applications in wholesale funding markets has completed its first live trades." Project Guardian is intended to investigate the potential applications of decentralized finance in wholesale funding markets.

The following information regarding the pilot is included in the announcement:

Foreign exchange and government bond transactions were carried out by DBS Bank, JP Morgan, and SBI Digital Asset Holdings against liquidity pools consisting of tokenized Singapore Government Securities Bonds, Japanese Government Bonds, Japanese Yen (JPY), and Singapore Dollars (SGD).

In May, the announcement of Project Guardian was made by the central bank of Singapore. Since that time, the regulator stated that it "has engaged the financial industry to identify significant areas for partnership," as it explained its actions.

The announcement also discloses in additional detail:

MAS will be kicking off two brand new industry pilots very soon.

The first one is concerned with financial aspects of commerce. According to what the Malaysian Monetary Authority (MAS) indicated, "Standard Chartered Bank is leading an initiative to study the issuing of tokens tied to trade finance assets." The goal of the project is to digitize the market for trade distribution by converting trade assets into transferable instruments that are more open to investors and transparent.

The management of wealth is the subject of the second pilot. According to the description provided by the central bank, "HSBC and UOB are partnering with Marketnode to enable native digital issuance of wealth management products," with the goal of "improving issuance efficiency and accessibility for investors."

"The live pilots led by industry participants illustrate that with the necessary guardrails in place, digital assets and decentralized finance have the potential to change capital markets," said Sopnendu Mohanty, Chief Fintech Officer of the MAS. This is a significant step toward the goal of enabling global financial networks that are more integrated and efficient. The official continued by saying:

The Monetary Authority of Singapore (MAS) has gained a more in-depth understanding of the ecosystem surrounding digital assets as a result of Project Guardian, which has helped to the creation of Singapore's digital asset strategy.

After the MAS made its announcement, JPMorgan's head of blockchain launch and Onyx Digital Assets, Tyrone Lobban, explained on Linkedin that the global investment bank had "executed its 1st LIVE trade on public blockchain using defi, tokenized deposits, and verifiable credentials as part of Monetary Authority of Singapore (MASProject )'s Guardian." Project Guardian is an initiative being undertaken by the Monetary Authority of Singapore.

He explained, "This is a major stride forward towards a future where finance may take place in a compliant manner on the blockchain utilizing public defi protocols. This is a move that will lead us closer to that future." The first steps toward institutional defiance have been taken." Lobban added:

This is the first trade by a regulated financial institution employing W3C verifiable credentials for compliant access to defi on a public blockchain. It is also the first tokenized deposit to be issued by a bank anywhere in the world.

To accomplish this, we conducted a trade with SBI Holdings LLC using a customized version of Aave that ran on the Polygon Technology blockchain. The trade involved tokenized Singapore dollars being exchanged for Japanese yen. The executive from JPMorgan Chase came to the conclusion that "we constructed a digital identification solution that blends identity proofs with trade instructions for 'on chain' verification, opening up a world of composable, pluggable identity."