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Singapore is working on fund tokenization regulation, global layer 1

Singapore tokenization

Yesterday, Monetary Authority of Singapore managing director Chia Der Jiun discussed tokenization during an event for asset managers. He covered some of the fund tokenization pilots that are part of Project Guardian and the MAS Global Layer 1 (GL1) initiative for tokenization.

He highlighted the tokenization benefits of instant settlement and process automation, which can create efficiencies and enable greater customization of funds.

That’s something being explored by the UK asset manager Schroders and fund distribution platform Calastone as part of Singapore’s Project Guardian public blockchain trials. A recent Calastone survey showed that 96% of APAC asset managers intend to have tokenization offerings within three years.

Another Project Guardian example mentioned was the use of digital Variable Capital Company (VCC) funds by UBS Asset Management.

Mr Chia said that as these Project Guardian pilots get closer to commercialization, “MAS is working with these pilot managers on the legal and regulatory treatment and implications of tokenised investment funds.”

As part of the review, it also welcomes input from other asset managers. 

Mr Chia also mentioned MAS’s work on the Global Layer 1 (GL1) blockchain initiative, which involves BNY Mellon, JP Morgan, DBS, and MUFG. MAS unveiled the project late last year. 

At the time MAS’s Leong Sing Chiong said, “GL1 will provide a foundational digital backbone and bring markets together with similar principles of openness and accessibility as the public internet.”

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