Project Guardian was floated in partnership with DBS Bank, JPMorgan Chase and Marketnote. Per the announcement, the MAS and its partners will “test the feasibility of applications in asset tokenisation and DeFi while managing risks to financial stability and integrity.” The project will explore use cases in 4 categories, including Open, interoperable networks, Trust anchors, Asset tokenisation, and Institutional grade DeFi protocols.
Within the context of its announcement, the MAS defined tokenisation as “the process of digitally representing assets or items of value through a smart contract on a blockchain. This allows high value financial and real economy assets to be fractionalised and exchanged over the internet on a peer-to-peer basis.”
Per its goals, the Singapore banking regulator seeks avenues whereby the emerging DeFi and smart contract governed finance services world will be brought under appropriate regulatory oversight in a bid to provide encompassing benefits to all industry participants.
“MAS is closely monitoring innovations and growth in the digital asset ecosystem and working through the potential opportunities and risks that come with new technologies – to consumers, investors and the financial system at large. Through practical experimentation with the financial industry and the broader ecosystem, we seek to sharpen our understanding of this rapidly transforming digital assets ecosystem. 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,” said Sopnendu Mohanty, Chief FinTech Officer MAS.
While it defined the 4 primary areas it wishes to focus its exploration on, the MAS said additional innovations can be shared by industry participants provided they align with the overall goal it aims to achieve, a move that is contrary to earlier attempts to tighten anything crypto business activities.
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