On Tuesday, Singapore’s deputy prime minister, Heng Swee Keat, told newsmen that the country is launching “project guardian.” The project will involve the launch of DeFi use cases. It would also seek to tokenize financial assets.
Under this initiative, Singapore’s monetary authority (MAS) will partner with leading financial institutions and virtual asset providers. There will be a pilot program for interested persons. Thus, the authorities can determine whether this initiative is feasible and the integrity risks involved.
The pilot would also reveal the regulatory policies that the authorities still need to include in this initiative. Generally, the pilot program will determine whether the initiative is ready for public launch.
MAS, Banks, And VASPs Collaborate
The nation’s deputy prime minister shared his opinions about the crypto industry at this year’s Asia Tech X Singapore conference. Keat said that there are underlying risks in the crypto market. But it can shape the future of the finance industry forever.
He also advised retail investors not to invest in digital assets. He added that retail investors shouldn’t invest no matter the level of protection authorities are offering. Keat urged the MAS to partner with leading banks and VASPs for the smooth running of this new initiative.
The deputy prime minister mentioned DBS bank, JPMorgan, and Marketnode as some of the banks and VASPs involved in the new project. It is worth noting that Marketnode is the digital asset arm of the Singapore exchange.
Some use cases that the MAS aims to develop include large-scale DApps, trust anchors, and open, interoperable networks. Nevertheless, the project requires a permission liquidity pool. It also requires secure lending and borrowing on a public network.
A top-level executive with MAS, Sopnendu Mohanty, shared his opinions about the new initiative. Mohanty stated that “the feedback from this initiative will determine the development of appropriate policy frameworks.”
“Thus, we can gain massively from the DeFi-related solutions without too much risk exposure,” he added. The banks and the VASPs will discuss policies relating to crypto trading, DeFi market systems, blockchain-built solutions, and financial settlement with crypto.
Singapore’s Crypto Policy Regulation Is Tighter
Recently, many VASPs have been relocating from Singapore. The reason is that the MAS has increased regulatory scrutiny on the players in the crypto industry. Presently, there is a limit to the promotion of crypto tokens.
Other tough crypto sanctions are forcing many crypto firms to leave Singapore. Yet, the nation’s 2022 financial services and markets bill even places greater restrictions on crypto operations.
Nonetheless, crypto adoption keeps increasing. That might explain why the authorities are planning to create a DeFi hub. They would hope that they can attract crypto firms to create more crypto use cases through this DeFi hub.
James Thompson 
Michael Rafael