The Central Bank of Singapore has shown some enthusiasm and interest in the DeFi sector recently. As per the latest media articles, the CB is working in tandem with JPMorgan and DBS. Another organization that is joining hands in the same venture is Marketnode. All the aforementioned banks, financial institutions, and cryptocurrency organizations are working together on a new DeFi project.
The main objective of the venture is to tokenize the securities at Singapore Central Bank. For the time being, the group of experts collaborating on the project is conducting tests for the DeFi pilot. The Monetary Authority of Singapore or MAS is also playing an important role. The DeFi pilot has been dubbed the Project Guardian Initiative that is set to go live on Tuesday.
The main objective of Project Guardian is to ensure that the project can measure the compatibility of DeFi projects running on Ethereum and other blockchain networks. The project will also quantify wholesale lending options and look for ways to make the borrowing procedure more fluid. Furthermore, the project will also take into consideration mitigating financial risks.
In the first phase of Project Guardian, the experts are collaborating on successfully converting bonds and deposits into digitized forms. The developers working on the project are planning to make use of smart contracts that would also facilitate trade execution.
The Deputy Prime Minister of Singapore, Heng Swee Keat, recently told the media that the project would make its debut at the Asia Tech and Singapore Summit on Tuesday.
The latest changes proposed by MAS are hinting at a change of heart from its previous cryptocurrency stance. The government is opening up its gates for permissionless blockchain projects. With this new transition, the fleeing startups and blockchain developers might want to reconsider their decision.
The MAS project is empowered by JP Morgan Chase, which operates the Onyx Digital Assets service to allow the investors to acquire US Treasury products on intraday that are working on behalf of hedge funds and asset management organizations.
A European bank hailing from France called BNP Paribas joined the Onyx network, and it has already facilitated $300 billion in digital token transactions since 2020.
However, the stringent cryptocurrency regulatory stance of the government has kept crypto organizations like Binance, Bybit, and Three Arrows Capital on their toes, and many are planning to migrate to Dubai for better growth opportunities.