Singapore’s central bank, the Monetary Authority of Singapore (MAS), has announced plans to collaborate with monetary authorities in Japan, Switzerland, and the United Kingdom for joint digital asset pilots. The collaboration aims to promote joint crypto ventures and explore the possibilities in fixed income, foreign exchange, and asset management products.
Project Guardian and Asset Tokenization
This initiative builds upon Singapore’s ongoing asset tokenization project, known as Project Guardian, which was launched in 2022. Under Project Guardian, MAS collaborated with 15 financial institutions to conduct pilots on asset tokenization, bringing about increased transaction efficiency. Considering the growth and complexity of these pilots, MAS has established the Project Guardian policymaker group, comprised of the Financial Services Agency of Japan (FSA), the Financial Conduct Authority (FCA) of the United Kingdom, and the Swiss Financial Market Supervisory Authority (FINMA). The group’s goal is to facilitate policy discussions, identify risks and legal gaps related to digital assets, and work on the development of common standards for digital asset networks.
“MAS’ partnership with FSA, FCA and FINMA shows a strong desire among policymakers to deepen our understanding of the opportunities and risks arising from digital asset innovation,” said Leong Sing Chiong, deputy managing director at MAS. “Through this partnership, we hope to promote the development of common standards and regulatory frameworks that can better support cross-border interoperability, as well as sustainable growth of the digital asset ecosystem.”
Singapore’s Engagement in the Digital Currency Space
Singapore has been actively engaging with global financial authorities in the realm of digital currencies. In September 2023, MAS successfully completed a joint test of cross-border trading and settlement of wholesale central bank digital currencies in collaboration with the Bank for International Settlements and the central banks of France and Switzerland.
To instill confidence in the market and protect investors from potential losses, Singapore also revealed plans to impose a trust requirement on cryptocurrency exchanges. This regulation will mandate that cryptocurrency exchanges keep customer assets in a trust. It is expected to be implemented before the end of the year.
Furthermore, Singapore is considering banning lending and staking for retail investors in the digital asset space. The MAS initiated a consultation on this measure in October last year, highlighting the high risks and speculative nature of digital payment token trading. While regulations play a crucial role in safeguarding consumers, traders must exercise caution.
