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Singapore’s Central Bank Pushes for Interoperable Tokenized Assets

Press Releases Crypto News CryptoBriefing Singapore’s Central Bank Pushes for Interoperable Tokenized Assets

The Monetary Authority of Singapore (MAS) has proposed an initiative to create an open and interoperable framework for tokenized digital assets in collaboration with the Bank for International Settlements (BIS), HSBC and other financial institutions. Built on the foundation of advancements in distributed ledger and smart contract technologies, the initiative, called Project Guardian, hopes to disrupt conventional models of financial services.

“Traditionally, financial and real economy assets are represented physically or through account balances on various proprietary platforms,” the report explained. “For instance, deposits are seen as balances in accounts at financial institutions, while securities such as bonds are held in accounts with Central Securities Depositories.”

However, new models are emerging due to advancements in technology. “Distributed ledgers offer the potential for peer-to-peer transactions without the need for centralized intermediaries, and smart contracts enable autonomous execution of financial transactions,” the report stated:

“Under this model, all participants interact with a common ledger […] This enables digital assets to be exchanged directly without the need for bilateral setups between organisations or with other networks.”

Rather than focusing on the speculation around unbacked digital assets, the true value lies in the digital representation of real-economy and financial assets. As the MAS, BIS and other organizations such as the International Monetary Fund (IMF) look to organize ideas that offer real-time accessibility, affordability and efficiency, using smart contracts could potentially unlock liquidity, driving economic growth and expanding investment options.

Despite these potential benefits, the market remains largely untapped.

The MAS released a comprehensive white paper on a protocol called Purpose-Bound Monday, which is a digital curren

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Author: Emily Tonelli

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