The Monetary Authority of Singapore (MAS) has released a comprehensive report exploring the integration of asset tokenization and decentralized finance (DeFi) in global financial systems. The report, named ‘Project Guardian: Enabling Open & Interoperable Networks,’ discusses the potential applications of DeFi and the conversion of tangible assets into digital equivalents. It advocates for the establishment of both open and private networks, emphasizing the need for a universal framework to guide the trading of digital assets across multiple networks. The MAS project, in collaboration with the Bank of International Settlements, aims to set best practices for DeFi protocols. The report highlights the risks associated with public networks, emphasizing the importance of secure private networks that only allow access to pre-approved entities. However, the regulation of DeFi is complex due to the lack of defined legal and regulatory guidelines and varying regulations across jurisdictions. The report concludes by stressing the importance of a unified international strategy to address these challenges. Multiple pilot projects are cited to demonstrate the advantages of tokenization, including enhanced customization, broader distribution, and reduced trading time and costs.
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