Singapore advances tokenization legislation and wholesale CBDC trials, Project Guardian makes a strong push.

The Monetary Authority of Singapore (MAS) has announced the launch of a pilot project for tokenized bills and wholesale Central Bank Digital Currency (CBDC), aimed at integrating tokenized assets into the mainstream financial system. This initiative is part of the “Project Guardian” framework and involves major financial institutions such as DBS Bank, OCBC Bank, and UOB. At the same time, MAS is drafting a regulatory framework for stablecoins to ensure value stability and reliable redemption. Singapore is systematically laying out tokenized financial infrastructure to strengthen its position as a global hub for digital financial innovation.

Tokenization of Bills and Pilot Architecture for CBDC Settlement

The core of MAS's pilot project is to create tokenized government securities settled with wholesale CBDC, a framework that significantly enhances the settlement efficiency of financial markets. Traditional securities settlement usually requires a T+2 cycle, whereas the tokenized version supports near-instant settlement, reducing counterparty risk and operational costs. The first batch of pilots has completed the issuance and trading of tokenized Singapore government bonds, testing the feasibility of the entire process from issuance and trading to settlement.

On the technical level, the pilot utilizes Distributed Ledger Technology (DLT) to create digital asset tokens, achieving atomic settlement with the wholesale CBDC issued by MAS (i.e., completing asset transfer and funds payment simultaneously). This design avoids settlement risks in traditional finance and lays the foundation for the tokenization of more complex financial products. MAS General Manager Sopnendu Mohanty emphasized: “Tokenized assets must achieve cross-network standardization and portability, and MAS encourages industry collaboration to build a unified market that supports tokenized assets and shared liquidity.”

Stablecoin Regulatory Framework and Financial Stability Considerations

The stablecoin regulatory framework being developed by MAS focuses on the quality of reserve assets and the redemption mechanism, aiming to prevent systemic risks similar to the 2022 Terra/Luna collapse. The draft requires regulated stablecoin issuers to hold high-quality liquid asset reserves, amounting to no less than 100% of the outstanding stablecoin value, and to ensure that users can redeem at face value under stress conditions.

This strict framework aligns with Singapore's strategy to position itself as a trusted digital financial center. Ravi Menon pointed out: “If underregulated stablecoins become systemically important, they could threaten financial stability.” To this end, MAS has set clear redemption time requirements—large-scale redemption requests should be processed within 5 working days, while retail users should enjoy a faster redemption channel. These standards may become a benchmark for global stablecoin regulation.

Key Elements of Singapore's Digital Financial Initiative

• Tokenization of Notes: First Pilot of Government Bonds
• Wholesale CBDC: Interbank settlement experiment completed
• Stablecoin regulation: 100% high-quality reserve requirement
• Guardian Program: Expanding to Forex and Fixed Income
• Participating Institutions: DBS, OCBC, UOB
• Settlement Efficiency: Near Instantaneous (Atomic Settlement)

Industry Cooperation and Market Expansion of the Guardian Program

The “Guardian Program” by MAS is a multi-phase initiative that has expanded from initial asset tokenization to more complex financial applications. The latest phase focuses on the tokenization of foreign exchange and fixed income markets, testing innovative features such as cross-chain settlement, automated compliance checks, and programmable financial contracts. This breadth of industry ensures that tokenization solutions have practical commercial viability rather than just being a technical demonstration.

The industry cooperation model reflects the unique advantages of Singapore's financial technology - the MAS provides regulatory guidance and technical standards, financial institutions contribute market knowledge and distribution networks, and technology companies provide blockchain infrastructure. This public-private partnership (PPP) model has attracted major global financial institutions, including HSBC, JPMorgan Chase, and Mitsubishi UFJ Financial Group, forming an innovation ecosystem with international influence.

The Global Competitive Landscape of Tokenized Finance

Singapore's systematic advancement in the tokenization finance sector has positioned it favorably in the digital finance competition both in Asia and globally. Unlike Hong Kong, which focuses on the development of cryptocurrency retail trading and ETFs, Singapore concentrates on wholesale financial infrastructure, aligning with its historical role as a wealth management and financial hub in Asia.

From a global perspective, Singapore is in direct competition with jurisdictions such as Switzerland, the UAE, and the UK. Switzerland leads in asset tokenization with its Crypto Valley ecosystem, the UAE attracts projects through the flexibility of its free zone regulations, while the UK promotes the development of digital securities based on its status as a financial center in London. Singapore's advantages lie in its rigorous regulatory framework, political stability, and its gateway position to the growing Asian markets, all of which support its long-term competitiveness.

Tokenization Boom: Institutional Innovation in the Rebuilding of Digital Finance

Singapore's tokenization financial initiative represents a silent yet profound revolution in financial infrastructure. While most countries are still debating the speculative nature of cryptocurrencies, Singapore has quietly constructed the core components of the next generation financial system—from tokenized assets to wholesale CBDC, from smart contracts to cross-chain settlement. This systematic advancement requires not only technological foresight but also institutional courage: finding a delicate balance between innovation and stability, efficiency and security, openness and sovereignty. Singapore's experiment may herald the arrival of an entirely new financial paradigm—no longer based on paper vouchers and overnight settlements, but built on programmable digital assets and instant settlements. In this sense, the MAS pilot is not just a technical test, but a rehearsal for the future financial order.