A new report from Ant International and derivatives body ISDA explores the use of tokenized deposits and foreign exchange for cross border payments. It’s part of the Monetary Authority of Singapore’s Project Guardian initiative, which is effectively a tokenization sandbox. Many of the world’s leading institutions are participants alongside regulators from other jurisdictions.
Tokenized deposits are one of the solutions that aim to address frictions in cross border payments, including high cost, delays and a lack of transparency. A current challenge with tokenized deposits is several offerings only work amongst the clients of a single bank. Not only that, but each one of the solutions is bespoke and uses a variety of blockchain technologies.
Hence, the goal of the paper is to analyze design principles and standards to enable interoperability, as well as how to address risks. In doing so, it explored three use cases.
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