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Singapore Conducts In-Depth Research on DeFi and Launches Crypto Initiative
2022/06/01By:
It is reported that the monetary authority of Singapore (MAS), the highest financial regulator in the city-state, cooperates with the financial industry to launch “project Guardian”. The initiative aims to investigate the potential use cases of asset tokenization and Decentralized Finance (DeFi ) and will guide the country’s efforts to become a cryptocurrency center.
Singapore to Strengthen its Crypto Presence
According to a recent Bloomberg report, the first phase of the upcoming project will explore the application of DeFi in the wholesale financing market. This work will be led by DBS, the largest bank in Singapore, JPMorgan Chase, an American multinational financial institution, and marketnode, a cryptocurrency venture.
“Project Guardian” will also aim to ensure that the DeFi universe will not damage the country’s financial stability. Talking about this issue is sopnendu Mohanty, chief financial technology officer of the monetary authority of Singapore.
“Through practical experiments with the financial industry and the broader ecosystem, we seek to strengthen our understanding in this rapidly transforming digital asset ecosystem. The experience gained from” project Guardian “will help provide policy markets with information about regulatory barriers that take advantage of the benefits of DeFi while mitigating its risks.”
Another important goal of the cooperation is to prevent the loss of cryptocurrency talents and blockchain enterprises to other destinations. Nearly two months ago, bybit, a digital asset platform, moved its global headquarters from Singapore to Dubai. Not long after, hedge fund managers — Sanjian capital — revealed similar intentions. Like Dubai (which recently opened its arms to the blockchain field), Singapore is also willing to build itself into a cryptocurrency center so that the local digital asset ecosystem can thrive.
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Strict Rules Can be Beneficial
As a highly developed economy with a skilled population, it is not surprising that many Singaporeans are interested in the cryptocurrency market. The independent reserve study last year estimated that 43% of the local people have entered the ecosystem. Public awareness of cryptocurrency is also at a high level, as 93% of participants say they know bitcoin.
As expected, Ravi Menon, the head of the monetary authority of Singapore, promised that the regulator did not plan to ban the asset class. Instead, it would apply a comprehensive regulatory framework to it.
Earlier this year, Menon raised the concern that criminals may use cryptocurrencies for criminal activities. Therefore, the rules for its implementation should be as “strict” as possible. According to him, the legislation will not only restrict illegal activities, but also reshape Singapore as a global digital asset center.
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