Singapore Fintech Digital Assets
As asset tokenization in financial services reaches an “inflection point,” Singapore is advancing its commercialization through coordinated initiatives aimed at increasing adoption. The focus is on establishing common industry standards and credible, regulated forms of tokenized money. For U.S. companies looking to remain globally competitive, understanding and engaging with these developments is essential. Singapore’s proactive, coordinated approach—driven by regulatory clarity and public-private partnerships—provides a blueprint for scalable commercialization of digital assets and offers opportunities for cross-border innovation, investment, and collaboration.
At the heart of Singapore’s strategy is the transformation of real-world assets—such as bonds, equities, and real estate—into digital tokens. This process can unlock liquidity, streamline operations, reduce transaction costs, and foster greater financial inclusion. Led by the Monetary Authority of Singapore (MAS), the initiatives aim to improve financial infrastructure, attract investment, maintain a competitive edge globally, and promote financial inclusion. Key initiatives include:
1. Commercial Networks for Tokenized Assets: A consortium of banks, including Citi, HSBC, Schroders, Standard Chartered, and UOB, has formed the Guardian Wholesale Network Industry Group to enhance access to and liquidity of tokenized assets.
2. Industry Frameworks for Tokenization: The Guardian Fixed Income Framework (GFIF) provides guidelines for tokenizing debt capital markets, while the Guardian Funds Framework (GFF) focuses on best practices for tokenized investment vehicles, facilitating easier fund settlement.
3. Common Settlement Facility: The Singapore dollar wholesale central bank digital currency (SGD Testnet) allows eligible financial institutions to settle tokenized transactions confidently and efficiently.
4. Cross-Border Transaction Ecosystem: The Global Layer One (GL1) initiative aims to develop a robust infrastructure for seamless cross-border trading of tokenized assets. Participating banks, such as BNY and JP Morgan, are defining the governance and technology requirements for GL1.
With contributions from the International Monetary Fund, World Bank, and Deutsche Bundesbank, these efforts create a supportive environment for digital assets in Singapore and solidify its position in the future of asset tokenization.
Digital Asset Regulation
The Monetary Authority of Singapore (MAS) has released a consultation paper for a new licensing framework for Digital Token Service Providers (DTSP). This framework will complement the existing Payment Services Act 2019 and will regulate Singaporean corporations and individuals providing digital token services, even outside of Singapore. Digital tokens include Digital Payment Tokens like Bitcoin and Tokenized Securities. DTSPs must obtain a license from MAS, adhere to various conduct requirements, and establish a significant presence in Singapore, including personnel, a physical office, and minimum financial resources.
Next Steps for U.S. Companies
U.S. firms interested in the Singapore market or seeking strategic fintech partnerships should closely monitor Singapore’s tokenization initiatives. Key actions include:
• Engaging legal and compliance teams to align with MAS’s regulatory expectations
• Exploring participation in pilot programs or partnerships within Singapore’s tokenization ecosystem
• Attending the Singapore Fintech Festival—a leading industry event showcasing innovation and collaboration in digital finance
For more information contact U.S. Commercial Service in Singapore: Amelia Yeo, Commercial Specialist, CS Singapore.