Japan’s financial regulator, the Financial Services Authority (FSA), has announced a partnership with the Monetary Authority of Singapore (MAS) to conduct joint supervision and pilot testing of cryptocurrency projects under the latter’s “Project Guardian” initiative.
Participation will be limited to the observer capacity of the FSA at this stage. “The project aims to test the viability of the application of digital technologies such as asset tokenization through pilots, while managing risks to financial stability and integrity. Current industry pilots include fixed income, foreign exchange, and asset and wealth management,” the regulator wrote.
Project Guardian was established by MAS in May 2022 to test the “feasibility of asset tokenization and DeFi applications” under appropriate regulations. The project has four focus areas, open and interoperable networks, trust anchors, asset tokenization, and institutional-grade DeFi protocols.
In one notable item of the initiative, “DBS Bank, JP Morgan and SBI Digital Asset Holdings targeted a flow consisting of tokenized Singapore Government Bonds, Japanese Government Bonds, Japanese Yen (JPY) and Singapore Dollar (SGD).” Sex pools traded foreign exchange and government bonds.”