According to Decrypt, Japan's SBI Digital Markets (SBIDM) is enhancing its involvement in the Monetary Authority of Singapore's (MAS) Project Guardian by launching new initiatives to promote the use of tokenized securities in global markets. In collaboration with major financial institutions, the SBI Group subsidiary is working on a cross-border framework for tokenized assets, aiming to connect regulated digital asset exchanges across various regions to increase liquidity and reduce costs.
SBIDM's Fixed Income pilot is focused on creating an international network for tokenized asset-backed securities, encompassing both initial issuance and secondary trading. The company announced plans to introduce its first structured note, backed by luxury wine assets, in the coming months. This will be followed by products linked to intellectual property and commodities. These securities will be offered in both traditional and digital formats to attract a wide range of investors, utilizing a blockchain-agnostic infrastructure to facilitate global transactions.
In parallel, the Asset and Wealth Management pilot with UBS Asset Management is assessing a UBS tokenized money market fund. Building on last year's technical advancements within Project Guardian, this pilot incorporates blockchain-powered automation to streamline fund subscription and redemption processes. Enabled by Chainlink's Cross-Chain Interoperability Protocol, smart contracts enhance interactions within the fund while reducing operational costs, which SBIDM describes as a significant transformation in the $63 trillion mutual fund industry.
These efforts are part of MAS's broader strategy to encourage institutional digital asset adoption under Project Guardian by leveraging both public and private blockchain technologies. Public blockchains are open, decentralized networks where anyone can participate, as seen with Bitcoin or Ethereum. In contrast, private blockchains are closed networks with restricted access, often controlled by a central entity.
SBIDM's initiatives align with other key players in Singapore's tokenization sector expansion under the project. Standard Chartered is exploring digital bond issuance using tokens from public blockchains like Ethereum and Stellar. HSBC, in collaboration with Temasek, is testing tokenized sustainable bonds on private blockchains to ensure compliance with financial regulations. JP Morgan, a long-time Project Guardian partner, has previously experimented with tokenized deposits on both public and private blockchains to improve settlement efficiency in cross-border transactions and tokenized portfolios.