MAS kicks off pilot test of DeFi application in wholesale funding markets

The industry pilot was conducted by DBS Bank, JP Morgan and SBI Digital Asset Holdings.

The Monetary Authority of Singapore (MAS) has begun testing the application of decentralised finance (DeFi) in wholesale funding markets.

Under the first industry pilot, DBS Bank, JP Morgan and SBI Digital Asset Holdings conducted foreign exchange and government bond transactions against liquidity pools comprising tokenised Singapore Government Securities Bonds, Japanese Government Bonds, Japanese Yen (JPY) and Singapore Dollar (SGD).

The first live trades were "successfully conducted," said the MAS.

More industry pilots have also been launched to test the application of asset tokenisation and DeFi across a broader range of use cases in the financial sector.

“The live pilots led by industry participants demonstrate that with the appropriate guardrails in place, digital assets and decentralised finance have the potential to transform capital markets. This is a big step towards enabling more efficient and integrated global financial networks," Sopnendu Mohanty, MAS chief FinTech officer, said.

“Project Guardian has deepened MAS’ understanding of the digital asset ecosystem and has contributed to the development of Singapore’s digital asset strategy,” Mohanty added.