Policymakers Partner for “Responsible” Digital Asset Innovation
Posted by Colin Lambert. Last updated: October 31, 2023
Following on from Project Guardian, The Monetary Authority of Singapore (MAS) has announced that it is partnering the Financial Services Agency of Japan (FSA), the Swiss Financial Market Supervisory Authority (FINMA) and the UK’s Financial Conduct Authority (FCA) to advance digital asset pilots in fixed income, foreign exchange and asset management products.
MAS says the pilots under Project Guardian have demonstrated the potential to reap significant market and transaction efficiencies from the use of tokenisation. As the pilots grow in scale and sophistication, there is a need for closer cross-border collaboration among policymakers and regulators and as such MAS has therefore established a Project Guardian policymaker group comprising FSA, FCA and FINMA.
Specifically, the policymaker group aims to advance discussions on legal, policy and accounting treatment of digital assets; identify potential risks and possible gaps in existing policies and legislation relevant to tokenised solutions; explore the development of common standards for the design of digital asset networks and market best practices across various jurisdictions; and promote high standards of interoperability to support cross-border digital assets development. It also seeks to facilitate industry pilots for digital assets through regulatory sandboxes, where applicable; and promote knowledge sharing among regulators and the industry.
“MAS’ partnership with FSA, FCA and FINMA shows a strong desire among policymakers to deepen our understanding of the opportunities and risks arising from digital asset innovation,” says Leong Sing Chiong, deputy managing director (markets and development), MAS. “Through this partnership, we hope to promote the development of common standards and regulatory frameworks that can better support cross border interoperability, as well as sustainable growth of the digital asset ecosystem.”
Sarah Pritchard, executive director of markets and international at FCA, adds, “We are pleased to join Project Guardian. The UK’s asset management sector – which is the second largest in the world – sees significant potential in the use of distributed ledger technology to drive innovations, efficiencies, and enhanced value for customers. We look forward to working with our global partners to examine the market benefits, regulatory challenges, and industry use cases of asset and fund tokenisation.”