Singapore Launches DeFi Project Guardian
The Monetary Authority of Singapore (MAS) held the first live auction under Project Guardian. In fact, they have become a testing ground for institutional-level DeFi protocols.
The Project Guardian pilot was presented by MAS in May 2022. Its main goals were to transform capital markets and increase the efficiency of global financial markets using DeFi and virtual assets.
According to the developers, Project Guardian will create highly interoperable open networks based on popular blockchains for trading tokenized assets between platforms and liquidity pools. And on November 2, MAS announced a trial live auction.
DBS Bank, JP Morgan and SBI Digital Asset Holdings (a division of the Japanese SBI Group) took part in testing the project. The procedure consisted of two stages:
• live cross-currency operation with tokenized deposits in Singapore dollars (SGD) and Japanese yens (JPY);
• a simulation session of buying and selling digitized Singaporean securities and Japanese bonds.
The first use of Project Guardian demonstrated that operations using the Aave protocol on Polygon are instantaneous. Additional benefits for direct participants are maximum transparency and reduced costs due to the absence of intermediaries. All this makes the implementation of smart contracts more profitable compared to traditional transactions in over-the-counter markets.
“Project Guardian has deepened MAS's understanding of the digital asset ecosystem and contributed to the development of Singapore's digital asset strategy. We look forward to working with other institutions to advance the global learning of digital asset regulation policies, standards and best practices and responsible innovation,” said Sopnendu Mohanty, Chief Financial Officer of MAS.
After testing Project Guardian in Singapore, they are starting to implement the following programs for the financial sector. The first trade finance project will involve Standard Chartered Bank. It is dedicated to the digitization of the trade distribution market and the transformation of assets into tools that attract users with accessibility and transparency.
The second program is about money management. It will involve the British bank HSBC, the Singaporean financial group UOB and Marketnode, which is the result of a collaboration between the Singapore Exchange and Temasek investment company. The goal of the participants is the native digital emission of money management products that guarantee accessibility and high efficiency to users.
