Singapore Taking Steps for Tokenized Assets Adoption

The Monetary Authority of Singapore (MAS) is taking steps to make tokenization more common in financial services. On 04 November, the regulator announced its plans to support the commercialization of asset tokenization through a media release.

The regulatory plans include making a commercial network to advance the liquidity of tokenized assets, developing market infrastructures, escalating the industry frameworks for better implementation of tokenized assets, and providing access to a common settlement facility for tokenized assets.

MAS is forming networks to increase the trading of tokenized assets. Project Over 40 financial institutions and policymakers are involved in trials to use tokenization in capital markets. Industry Group, Project Guardian also published two frameworks Guardian Fixed Income Framework (GFIF) and Guardian Funds Framework (GFF) for better implementation of tokenized assets by financial institutions. 

The GFIF will provide Guidelines for using tokenization in debt markets (like bonds) and the GFF will suggest best practices for creating and managing tokenized investment funds.

On this plan, Mr Leong Sing Chiong, Deputy Managing Director (Markets and Development) of MAS said, “MAS has noticed a lot of interest in turning assets into digital tokens, especially in areas like bonds, foreign exchange, and asset management. We are encouraged by the keen participation from financial institutions and fellow policymakers to co-create industry standards and risk management frameworks to facilitate commercial deployment of tokenized capital markets products, and scale tokenized markets on an industry-wide basis.”

MAS seeks to make tokenization a standard practice in the financial industry, making it easier to trade and manage digital assets, and ensuring that these processes are safe and efficient.