Singapore’s Central Bank Launches Framework for Digital Asset Networks

<p>The Monetary Authority of Singapore (MAS), also the
central bank, has released a report on the framework for creating interoperable
networks for digital assets. The report is part of the regulator's measures to
ensure that emerging digital asset networks are safe and efficient.</p><p>Dubbed 'Enabling Open
&amp; Interoperable Networks', the report was developed in collaboration with
experts at the Bank of International Settlements (BIS), Committee on Payments
and Market Infrastructure (CPMI). The project also attracted contributions from
participating financial institutions, according to a statement published
today (Monday).</p><p>Evolving Digital
Networks</p><p>Furthermore, the report considers the application of the
CPMI-IOSCO principles for financial market infrastructure to the evolving
models of digital networks. The principles focus on the international standards
for payments systems, central securities depositories, securities settlements,
central counterparties, and trade depositories.</p><p>Additionally, MAS has announced
an expansion of the 'Project Guardian' to assess the potential of asset tokenization
across more financial asset classes. In this regard, <a href="https://www.financemagnates.com/institutional-forex/singapore-fines-banks-insurer-28m-for-breaches-linked-to-wirecard-case/" target="_blank" rel="follow">MAS</a> has established the Project Guardian Industry
Group, which brings together 11 financial institutions. Project Guardian is the regulator's initiative to test the feasibility of asset tokenization and Decentralized Finance (DeFi). </p><p>The enlisted financial
institutions in the initiative would test asset <a href="https://www.financemagnates.com/terms/t/tokenization/">tokenization</a> across financial
asset classes. Major banks, including HSBC, Standard Chartered, Citi, and DBS,
would carry out pilot studies across wealth management, fixed income, and
foreign exchange, the regulator noted.</p><p>According to MAS' past
statements, the regulator has shown commitment to the technologies
underpinning digital assets. However, the watchdog is keen to restrict
the risks associated with digital assets, including stablecoins and <a href="https://www.financemagnates.com/cryptocurrency/coins/central-banks-exploring-the-potential-of-issuing-a-digital-currency/" target="_blank" rel="follow">CBDCs</a>.</p><p>MAS Explore Efficiency
in Digital Networks</p><p>Leong Sing Chiong, MAS' Deputy Managing Director of Markets and Development, commented: "While MAS strongly discourages and seeks to restrict
speculation in cryptocurrencies, we see much potential for value creation and
efficiency gains in the digital asset ecosystem." </p><p>Most recently, MAS proposed standards for the use of digital money, including CBDCs and tokenized
bank deposits on a <a href="https://www.financemagnates.com/terms/d/distributed-ledger-technology-dlt/" target="_blank" rel="follow">distributed
ledger</a>. The proposal looked
into how <a href="https://www.financemagnates.com/terms/s/settlement/">settlement</a> efficiency, merchant acquisition, and user experience in
digital assets can be achieved.</p><p>The technical paper was
produced in partnership with the International Monetary Fund (IMF), Bank of
Italy, and Bank of Korea, among other financial institutions.</p>

This article was written by Jared Kirui at www.financemagnates.com.