SBI Digital Markets deepens cooperation with Singapore to advance tokenized securities.
Japan's SBI Digital Markets (SBIDM) has strengthened its role in Singapore's Monetary Authority (MAS) 'Project Guardian', launching a new pilot program aimed at promoting the application of tokenized securities in the global market. SBIDM is collaborating with leading financial institutions to develop a cross-border framework for tokenized assets, connecting regulated digital asset exchanges across multiple regions to enhance liquidity and reduce costs.
Through a fixed income pilot program, SBIDM is establishing an international network focused on tokenized asset-backed securities, covering initial issuance and secondary trading. SBIDM announced on November 4 that it plans to issue the first structured notes backed by luxury wine assets in the coming months, followed by products related to intellectual property and commodities.
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Launch of luxury wine-backed notes to attract a wide range of investors.
These securities will be offered in both traditional and digital forms to attract a wide range of investors and will adopt blockchain-agnostic infrastructure designed to support global transactions. Meanwhile, a pilot program in collaboration with UBS Asset Management is assessing UBS's tokenized money market fund.
This pilot program builds on last year's technological advancements from 'Project Guardian', integrating blockchain-driven automation to simplify the subscription and redemption process of funds. With the help of Chainlink's cross-chain interoperability protocol, smart contracts optimize interactions within the fund while reducing operational costs. SBIDM describes this innovation as a 'fundamental transformation' for the mutual fund industry worth up to $63 trillion.
Combination of public and private blockchains to promote the development of global tokenized assets.
All of this is part of MAS's broader vision to promote institutional digital asset adoption under 'Project Guardian', which leverages both public and private blockchain technologies. Public blockchains are open and permissionless networks where anyone can join, validate transactions, and view the ledger. They are decentralized and typically rely on large distributed networks to ensure security, such as Bitcoin or Ethereum.
In contrast, private blockchains are closed and permissioned networks. Access is limited to selected participants, typically controlled by a central entity or group. SBIDM's efforts are joined by other significant participants in Singapore's expanding tokenization sector, including Standard Chartered Bank. Standard Chartered is exploring the issuance of digital bonds using tokens on public blockchains such as Ethereum and Stellar.
HSBC is collaborating with Temasek to test tokenized sustainable bonds using private blockchains to maintain compliance with financial regulations. As a long-term partner of 'Project Guardian', JPMorgan has previously tested tokenized deposits on both public and private blockchains to enhance the efficiency of cross-border transactions and tokenized portfolio settlements.
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Expected Impact and Future Outlook
SBI's collaboration with Singapore is expected to have a profound impact on the global tokenized asset market. SBI not only broadens the range of options for investors but also opens new avenues for the tokenization of physical assets. As more financial institutions participate in 'Project Guardian', tokenized assets are expected to gain wider recognition and adoption globally.
In the future, SBI plans to continue developing tokenized products related to intellectual property and commodities, further expanding its product portfolio. These efforts will help achieve market efficiency and transparency, providing investors with a safer and more convenient investment environment. At the same time, through collaboration with global financial institutions, SBI is expected to play a key role in the global tokenized asset market, driving innovation and development in the industry.
