Key Takeaways
- The Monetary Authority of Singapore has partnered with JPMorgan Chase in order to explore the potential of DeFi through a pilot project.
- Binance, Bybit, and Crypto.com all have plans to expand into Dubai
JPMorgan Chase will help the central bank of Singapore lead a blockchain pilot that explores DeFi’s potential.
Project Guardian, launched by the Monetary Authority of Singapore (MAS), is a new initiative that will be tested in future.
Project Guardian is a test to see if DeFi applications (decentralized financial apps) running on public Blockchains including Ethereum can enhance wholesale lending and borrowing processes without adding undue risks. Tokenizing deposits and bonds, while smart contracts drive trade executions.
MAS also enlisted Singaporean multinational bank DBS – one of Asia’s largest financial institutions – alongside local digital asset issuance venture Marketnode to co-lead the program.
Heng, Singapore’s Deputy PM Heng Sweekeat announced the pilot on Tuesday at the Asia Tech x Singapore Summit. Heng, who also serves as coordinating minister for economic policies, urged retail investors to steer clear of cryptocurrencies — despite the government’s DeFi foray.
Heng, according to The Straits Times said that Singapore must “pierce through both the hubris and the veil of suspicion” Understanding digital assets is essential. “potentially transformative underlying technologies.” Also known as: “blockchain, not bitcoin.”
Project will focus on digital assets, such as tokens supported by traditional instruments and powered by the blockchain. The central bank of Singapore, which is also the country’s financial regulatory body, will use the results from the pilot to help inform the crypto policies it develops.
Singapore crypto bigwigs are already in Dubai
While initial signs indicate that MAS will use public (permissionless), blockchains for Project Guardian, tokenized bonds and deposit funds will be placed in a private (permissioned), liquidity pool to serve the needs of the pilot. At some stage, digital securities could be traded through local regulated online markets.
Project Guardian diverges from a similar – already live – DeFi initiative managed directly by JPMorgan.
MAS wants to explore permissionless systems; JPMorgan’s Onyx Digital Assets platform is powered by a private blockchain that facilitates the tokenization and trading of US Treasurys within intraday repurchase, or repo, markets — which are employed by hedge funds and other asset managers looking to borrow money at reasonable rates to fund big-ticket orders.
Blockworks reported that French Bank BNPParibas joined Onyx last week. Onyx had processed more than 300 billion digital tokens, representing US Treasurys, since December 2020’s launch.
The potential regulatory certainty via Project Guardian may not be enough to bring some of the crypto industry’s most prominent names back to Singapore.
The increased regulatory scrutiny, and the long waiting times to obtain licenses for crypto exchanges have clouded the hopes that Singapore will become a hub of digital assets. Binance’s localized exchange closed down in December last year.
Binance Singapore supported only 8 cryptocurrencies, at the time. This was just a fraction from the US-based platform of Binance, with its 100+ digital assets and the 600+ tokens of their flagship exchange.
Binance received regulatory approval in March to start operating in Dubai. They immediately began to look for 100 new employees in the area. Changpeng Zhao, the CEO and founder of Binance, had purchased property in Dubai months earlier.
Bybit’s crypto derivatives platform relocated to Dubai from Singapore in April. Singapore-based Crypto.com recently indicated that the company also plans to open an outpost in Dubai.
Three Arrows Capital, a long-standing crypto hedge fund company, also announced in April that it would move its headquarters to Dubai from Singapore. Co-founder Su Zhu cited “electric energy” Dubai was a leader in the digital asset sector at the time.
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