S&P Global Joins MAS's Project Guardian to Explore Asset Tokenization
Summary:
S&P Global Ratings has joined Project Guardian, overseen by the Monetary Authority of Singapore (MAS) to explore the impacts of asset tokenization on financial markets. The project focuses on creating standards, policy guidelines, and developing a digital asset ecosystem. S&P Global will participate in fixed income pilots, conducting transactions against liquidity pools of tokenized bonds and currencies. Project Guardian also indicates a focus area in wealth management and foreign exchange on public networks. Initially launched by MAS, JP Morgan, DBS Bank, and SGX venture Marketnodes, S&P Global now becomes the 24th member of the project's industry group.
S&P Global Ratings has recently become a participant in the huge Project Guardian, overseen by the Monetary Authority of Singapore (MAS). This project, which has been operational for two years, is exploring how tokenizing assets could influence the freshness and effectiveness of financial markets. Project Guardian is committed to laying down norms, formulating policy guidelines, and fostering a business-centered digital asset environment. S&P Global will be taking part in pilot projects associated with fixed income.
Andrew O'Neill, the analytical leader for S&P Digital Assets stated, "Our aim is to contribute our understanding and risk perspective to this platform to encourage robust risk control as this technology becomes integrated into financial markets."
Project Guardian is providing ample focus areas for S&P. Under the fixed income pilots, entities are conducting bond and foreign exchange transactions against tokenized bonds and currencies' liquidity pools. They are also executing repurchase agreements with digital bonds, alongside developing a listing framework for debt securities and an initial token offering for digital tokens to be presented on the Singapore Exchange.
Other areas of focus within the project include wealth management and foreign exchange on public blockchains, with a concentration on network compatibility. The project uses a four-component network model.
Project Guardian was set in motion by the MAS in May 2022 with initial participants being JP Morgan, DBS Bank, and the SGX venture Marketnodes. S&P Global is now the 24th member of Project Guardian’s industrial group, mainly consisting of large banks and asset managers.
The policy group comprises government organizations from countries such as the United Kingdom, Japan, Singapore, Switzerland, and France, and also includes the International Monetary Fund. There is also a group of three international associations.
Part of Project Guardian's focus is tokenization. JPMorgan carried out a live cross-border transaction in November 2022 using tokenized Singapore dollars and Japanese yen via the Polygon blockchain. This was the first decentralized finance trade carried out on a public blockchain by a major bank.
One of the notable inventions arising from the project is the deposit token, a type of stablecoin "issued by regulated and sufficiently overseen intermediaries". The Swiss Bankers Association and JP Morgan find the deposit token beneficial due to its stability and its ability to assimilate a central bank's digital currency into the orthodox banking system.
Published At
6/28/2024 12:49:08 AM
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