The Monetary Authority of Singapore (MAS) announced the beginning of Project Guardian. MAS partnered with industry giants including JP Morgan, DBS and SGX-Temasek and seeks to explore the economic potential of asset tokenization.
The Deputy Prime Minister and Coordinating Minister for Economic Policies, Heng Swee Keat revealed the initiative, named Project Guardian, while speaking at the Asia Tech x Singapore Summit.
The pilot, headlined by DBS Bank, JP Morgan, and SGX-Temasek digital asset venture Marketnode, is going to explore potential decentralized finance (DeFi) applications in wholesale funding markets.
The project’s goal is to carry out secured borrowing and lending on a public blockchain-based network through the application of smart contracts.
Via this initiative, MAS is exploring use cases in four chief areas, which includes open and interoperable networks. The regulator aims to utilize public blockchains to create networks that allow the trade of digital assets across platforms and be interoperable with existing financial structure.
Another area of focus will be making a trusted environment to carry out DeFi protocols with the assistance of regulated financial institutions.
Project Guardian involves the design of a permissioned liquidity pool made up of tokenized bonds and deposits. It will also study the introduction of regulatory safeguards into DeFi protocols to reduce market manipulation.
Also Read: Singapore Restaurants are Accepting Crypto Even with Govt Cooling.
The Chief Fintech Officer at MAS, Sopnendu Mohanty said the regulator is actively monitoring advancements in the digital asset ecosystem and is working through the potential pros and cons that come with new technology.
“The learnings from Project Guardian will serve to inform policy markets on the regulatory guardrails that are needed to harness the benefits of DeFi while mitigating its risks,” Mohanty said.
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