THE Monetary Authority of Singapore (MAS) has roped in global industry associations for its project to pilot promising asset tokenisation use cases.
It is also planning to develop standards, market practices and governing principles of foundational digital infrastructure for tokenised assets.
In a statement on Thursday (Jun 27), MAS said that the Global Financial Markets Association (GFMA), International Capital Market Association (ICMA) and the International Swaps and Derivatives Association (ISDA) have joined the project to drive common asset tokenisation standards in fixed income, foreign exchange (FX) as well as asset and wealth management.
MAS worked with 24 financial institutions over the past two years as part of the project, and these institutions include asset managers, market operators, custodians, credit rating agencies and commercial banks.
MAS will establish three workstreams to foster the development of standards and frameworks across key asset classes.
The fixed income workstream will work with ICMA to develop protocols and data specifications building on ICMA’s Bond Data Taxonomy, and consider the types of risk factors and disclosures required in a tokenised bond offering document. Workstream members will also partner GFMA to develop standard clauses for implementing smart contracts of fixed income products.
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The FX workstream, in partnership with ISDA and the Global Foreign Exchange Division of the GFMA, will develop FX data specifications, risk management frameworks, and FX documentation.
The asset and wealth management workstream will deepen collaboration with global custodians and asset managers, focus on common data models, and model risk considerations specific to fund tokenisation.
MAS has also published a white paper detailing the design principles, objectives, considerations and potential uses of the initiative that explores the development of a multi-purpose, shared ledger infrastructure based on Distributed Ledger Technology.
In the next phase, this initiative would explore the establishment of a non-profit organisation to develop common principles, policies and standards for operating a global shared ledger infrastructure.
