Chris Ngoi, CFA, CA

The Monetary Authority of Singapore (MAS) announced plans to support the commercialisation of asset tokenisation.  MAS will expand activities under The Global Layer One (GL1) Initiative to design an open digital infrastructure of international standards.  This will align governance, risk management controls, and settlement arrangements for cross-border transactions.  MAS aims to form commercial networks to deepen liquidity in tokenised assets through Project Guardian.  This will facilitate seamless transactions of tokenised assets across networks.  Two industry frameworks, the Guardian Fixed Income Framework (GFIF) and the Guardian Funds Framework (GFF), have been published to guide the implementation of tokenisation in debt capital markets and funds.  MAS will facilitate access to common settlement assets, including the Singapore dollar wholesale central bank digital currency (CBDC), for market testing purposes.  This initiative will improve fundraising, secondary trading, asset servicing, and settlement of tokenised assets.  It will also support the development of digital infrastructure and common standards to enable industry-wide adoption of tokenisation. Based on this, I posit MAS could potentially accept tokenised carbon credits.  MAS has already shown interest in supporting innovative financial solutions, including the commercialisation of asset tokenisation.  MAS has launched the Transition Credits Coalition to develop a new class of carbon credits aimed at accelerating the closure of coal-fired power plants.  Tokenised carbon credits align with MAS’s goal of promoting sustainable finance and supporting the transition to a low-carbon economy.  Tokenisation improves the efficiency of carbon markets by simplifying transactions and increasing liquidity.  By facilitating the trading of tokenised carbon credits, MAS helps achieve global climate goals, such as reducing greenhouse gas emissions and promoting renewable energy. MAS has launched the Transition Credits Coalition, which includes financial institutions, carbon exchanges, standard setters, and NGOs.  This coalition aims to develop a new class of carbon credits to accelerate the closure of coal-fired power plants.  MAS has initiated pilot projects to test the use of high-integrity transition credits in transactions for the early retirement of coal-fired power plants.  These credits are generated by retiring a coal plant early and replacing it with clean energy sources.  This is a good base to expand to general trading of fungible compliance carbon credits. Terence Nunis Terence K. J. Nunis, Consultant President, Red Sycamore Global

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DBS Bank have launched Treasury Tokens in a pilot with Ant International 👏 🌍 ⏱ This enables Ant International to be able to use the digital form factor to achieve INSTANT, multi-currency treasury and liquidity management on DBS’ permissioned blockchain for their entities across MULTIPLE markets as well as enabling to reduce the settlement of intra-group transactions from potentially days to SECONDS! 💰 🏦 This optimises intra-group liquidity and working capital, providing corporate treasurers with GREATER visibility, predictability and control over the entire group’s cash position. DBS’ permissioned ALSO blockchain is EVM-compatible and is integrated with its core payments engine which GREATLY enhances extensibility and interoperability with multiple industry payment infrastructures. 🚀 🇸🇬 This launch by DBS demonstrates how established commercial banks AND FIs can harness blockchain technology and smart contracts to deliver the NEXT GENERATION of banking services on a 24/7 and programmable basis. 👨‍💻 Soon Chong Lim, Group Head of Global Transaction Services, DBS Bank, said: “This new capability comes at a time when the treasury needs of businesses are evolving to meet the rise of e-commerce and on-demand services on a 24/7 basis. DBS Treasury Tokens and our partnership with Ant International demonstrates how corporates can seize such opportunities with full confidence that their liquidity management capabilities can scale in tandem. DBS’ permissioned blockchain also forms the building block for new efficiencies and capabilities in traditional banking services, such as programmable, fractionalised and atomic value transfer.” Read more on the link below! 👇 Sam Ho yuan yee wong Derrick Loi Geoff Jiang Piyush Gupta Rishikesh Nagwekar Nimish Panchmatia Sharon Tan Kelvin Li Tania Tan #dbs #antinternational #blockchain #treasury #liquidity #tokenisation #fintech #fintechnews #ecommerce #payments

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Securities and Futures Commission (SFC) - Circular to virtual asset trading platforms on licensing process and revamped Second-phase Assessment Source: https://lnkd.in/g7JHH6Vp #virtualassets #cryptoassets #digitalassets #hongkong #license #process #revamped #second #phase #asssessment Highlights: As part of its on-site inspection programme introduced in June 2024, the Securities and Futures Commission (SFC) has directly engaged and communicated with the senior management and ultimate controllers of deemed-to-be-licensed virtual asset trading platform (VATP) applicants (deemed applicants). Under this approach, the SFC has been able to provide guidance effectively to VATPs on its expected regulatory standards. The SFC will maintain the effective approach of proactive engagement and enhanced communication with the VATPs, by becoming a party to the engagement for the Second-phase Assessment to be conducted by VATPs. The SFC will also revamp the Second-phase Assessment to enhance its usefulness. The revamped Second-phase Assessment will focus on ensuring that VATP’s policies, procedures, systems and controls (P&P) are suitably designed and implemented by the VATP, and is required to be performed as a direct assurance engagement. Licensing procedures for VATPs The SFC has provided feedback to deemed applicants after conducting on-site inspections on all of them. It has also required them to submit a plan for their rectification measures in light of the inspection feedback. The SFC will grant a conditional licence to a deemed applicant after agreeing with it on its rectification plan. As a licensing condition, the VATP is required to complete the rectifications as planned, and perform penetration test and vulnerability assessment with satisfactory results before it can operate on a restricted scope of business. The penetration test and vulnerability assessment should be performed by an independent third party. The VATP’s management should ensure that all major and critical rectification steps have been taken for all medium to high-risk items identified in the penetration test and vulnerability assessment. Revamped Second-phase Assessment The VATP must notify the SFC and the EA of any subsequent material change to its P&P as soon as practically possible. It must also promptly report to the SFC any material breaches or failures identified during the Second-phase Assessment. To ensure its robustness, the SFC requires the assessment to be performed as a direct assurance engagement5 and signed off by a certified public accountant (practising). The EA should form an opinion on whether the VATP’s P&P are suitably designed and implemented to comply with the Guidelines for Virtual Asset Trading Platform Operators and the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations and SFC-licensed Virtual Asset Service Providers).

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𝐒𝐆𝐗 𝐛𝐞𝐚𝐭𝐬 𝐭𝐡𝐞 𝐃𝐫𝐮𝐦, 𝐖𝐞𝐥𝐜𝐨𝐦𝐢𝐧𝐠 𝐀 𝐃𝐚𝐬𝐡 𝐨𝐟 𝐃𝐢𝐦 𝐒𝐮𝐦! This is not something new. The Singapore Depository Receipts (SDRs) have actually been around on SGX for over a year now, focusing mainly on Thai stocks like the Airport of Thailand (SDR stock code: TATD), Advanced Info Services (TADD), CP ALL (TCPD), Delta Electronics (TDED), Gulf Energy (TGED), Kasikorn Bank (TKKD), PTT Exploration and Production (TPED), and Siam Cement (TSCD). Today, though, it’s extra exciting because SGX is debuting a new round of SDRs - this time for Hong Kong stocks! We’re talking 𝐀𝐥𝐢𝐛𝐚𝐛𝐚 𝐒𝐃𝐑 (𝐇𝐁𝐁𝐃), 𝐁𝐚𝐧𝐤 𝐨𝐟 𝐂𝐡𝐢𝐧𝐚 𝐒𝐃𝐑 (𝐇𝐁𝐍𝐃), 𝐁𝐘𝐃 𝐒𝐃𝐑 (𝐇𝐘𝐃𝐃), 𝐓𝐞𝐧𝐜𝐞𝐧𝐭 𝐒𝐃𝐑 (𝐇𝐓𝐂𝐃), and 𝐇𝐒𝐁𝐂 𝐒𝐃𝐑 (𝐇𝐒𝐇𝐃) - big, familiar names that give investors an alternative way to gain exposure to these underlying HK stocks. Maybe you will ask, why bother with SDRs if most platforms already give access to major global markets? Well, while there are certainly perks to buying the shares directly on HKEx, SDRs bring their own advantages. For starters, they allow for more “𝐛𝐢𝐭𝐞-𝐬𝐢𝐳𝐞” 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠. BYD (1211.HK), for example, trades in lots of 500 shares, which would cost around HK$148,500 per lot or >S$25k per lot based on yesterday’s close of HK$297, assuming an exchange rate of 1:5.87. On the other hand, BYD SDR will be trading on a 10:1 ratio, thus picking up 100 shares (which is 1 lot) of the BYD SDR on SGX would probably only cost investors around S$500+. This makes SDRs ideal for medium- to long-term investors who’d rather accumulate shares gradually instead of committing a large sum upfront. Another benefit - great for more active investors - is that SDRs make it much easier to do “𝐩𝐚𝐢𝐫 𝐭𝐫𝐚𝐝𝐢𝐧𝐠” 𝐨𝐧 𝐚 𝐬𝐢𝐧𝐠𝐥𝐞 𝐩𝐥𝐚𝐭𝐟𝐨𝐫𝐦 𝐢𝐧 𝐨𝐧𝐞 𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲. Say, for example, you’re bullish on an Alibaba recovery long-term but want some protection against near-term volatility(eg. maybe during earnings announcements). You can pair your Alibaba SDRs with short DLCs or put warrants to manage that risk more smoothly, all on SGX and in SGD. Lastly, SDRs let you take advantage of 𝐨𝐯𝐞𝐫𝐥𝐚𝐩𝐩𝐢𝐧𝐠 𝐦𝐚𝐫𝐤𝐞𝐭 𝐡𝐨𝐮𝐫𝐬, which means you can trade ahead of the HK market open. This is super helpful if there’s some price-sensitive news that breaks after HK closes - you can get a jumpstart the next day via the SDRs on SGX. Plus, during daylight savings, SGX’s hours also overlap with U.S. pre-market trading, so one can act on potential news from the U.S. too on the underlying stocks that are dual-listed! Not sure about you, but I am pretty excited to see how these HK SDRs pan out! More info on SDRs can be found here: https://lnkd.in/gJES2_G3 PS: The POEMS platform provides access to these SDRs. To open a poems trading account, click on "Open an account" > "Stocks and Shares" at tinyurl.com/TTP-dan #HKSDRs #debut #tradeSGX #excited #poems #danccs https://lnkd.in/g5Kc3z7D

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Institutional investors in Singapore are leading the charge in increasing their crypto allocations. BTC hitting all time high and a number of other positive headwinds in the US and beyond are generating huge interest. As more entities and individuals invest in cryptocurrency the need for the crypto payment processing capability of WCT Pay increases. #cryptocurrency #payments

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While the media is actively following the virtual assets #VA market and regulatory development in Hong Kong from BTC & ETH spot ETFs to VATP licensing, another “more boring” yet massive real economy and mainstream finance #TradFi opportunity is emerging where the different building blocks are quietly coming in place. The total value of #tokenised real-world assets #RWA, excluding stablecoins, is around US$5 billion for 2024, primarily across #commodities, #privatecredit, and #UStreasuries, according to estimates by a paper published by Standard Chartered and Synpulse. On the other hand, the total addressable market size for #TokenisedTradeFinance, including the trade finance gaps, amounts to around US$14 trillion. Expected market size for overall tokenised real-world assets could reach up to US$30.1 trillion by 2034 with trade finance asset tokenisation making up to 16% of the total market then. In Hong Kong, #ProjectDynamo, a collaboration between Standard Chartered, Bank for International Settlements – BIS Innovation Hub Hong Kong, Hong Kong Monetary Authority (HKMA), and technology companies, explores how digital trade tokens can improve the whole supply chain finance process. To download the paper: https://lnkd.in/gqW_J5VC FintechHK Alpha Lau Christopher Hui Joseph HL Chan Julian Ip Charles Ng Jason Fong Karen Mak Julia Chan pauline fan Peggy Kwok King Lin Brian Cook Simon Chan 陳思浩

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DBS Bank launches blockchain-powered treasury tokens pilot for 24/7 treasury and liquidity management. The treasury tokens, enabled by permissioned blockchain, is integrated with the bank’s core payments engine and uses smart contracts and tokenisation to improve banking efficiencies. The tokens could reduce the time taken to settle intra-group transactions from days to seconds, making treasury and liquidity management more efficient, especially for large companies that need to manage payments, collections, funding needs and cash positions across time zones and currencies. #tokenization #blockchain #permissionedblockchain #dlt https://lnkd.in/d6XzkN9D

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OMFIF - Digital Assets: A Long-Awaited Revolution Source: https://lnkd.in/gJfPrEaG #omfif #survey #adoption #revolution Credits: Lewis McLellan Burhan Khadbai Julian Jacobs Katerina Liu Highlights: DLT ADOPTION NEARS Our survey reveals a story of slowly shifting attitudes. The share of survey participants who are considering adopting DLT and/or blockchain has increased by 9% to 38% this year from 29% in 2023. The increase in issuance is more pronounced, indicating that those already active with blockchain debt issuance are accelerating more rapidly than new entrants. CBDCs FAVOURED OVER OTHER SETTLEMENT SOLUTIONS While stablecoins can provide a means of settling cash on-chain, their relative novelty means that market participants are reluctant to embrace the new risks they may present. One survey participant highlighted this concern stating, ‘only CBDCs completely remove unnecessary credit/counterparty risk’. TOKENISATION MAY BRING CHANGES TO MARKET STRUCTURE  Survey participants’ activities also demonstrate this thinking – 65% are not working on incorporating tokenised assets into their own operations, while 15% are considering it. The final 20% are presently testing use cases. MARKET MAY NOT BE READY FOR FASTER SETTLEMENT  Respondents still showed a preference for longer settlement cycles. T+2 and T+3 settlement cycles were chosen by 24% and 20% of respondents. Though shorter settlement cycles are beneficial for avoiding settlement risk, they bring additional operational challenges. Because of this, 24% of respondents believe that settling on demand might be the best option. ‘We must stay flexible on the settlement cycle because it can be difficult for some issuers to reduce the cycle. However, [it] should be possible,’ stated one survey participant. SECURITY RISKS A LEADING CONCERN FOR DIGITALISATION Perceptions of cybersecurity risks are growing: the share of survey participants that identified it as a risk of digitalisation increased to 76% from 48% in 2023. ATTITUDES TO POTENTIAL ROLE OF DLT ARE SOFTENING Market participants are eyeing the growing role for DLT in capital markets infrastructure. Some 42% of respondents believe that blockchain will become the dominant form of financial markets infrastructure. BOND MARKETS WILL LEAD THE PATH TO TOKENISATION  The likelihood of tokenisation for various asset classes is not uniform. Given the positive outcomes of numerous tokenised bond projects, it is not surprising that 65% of survey respondents believe that bonds are prime candidates. Survey participants also expect commodities (52%) and public stock (50%) to be tokenised. FASTER SETTLEMENT AND REDUCED COUNTERPARTY RISK Most notably, 74% of participants selected faster settlement, followed by reduced counterparty risk at 61%. The use of smart contracts may support these benefits as they facilitate transactions without the need for intermediaries and lower transaction costs

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Singapore recognized as a global financial hub, has established a robust regulatory framework to govern the ever-evolving landscape of cryptocurrencies. Let us delve into some of the most impactful crypto regulations in Singapore: 1: Payment Services Act (PSA) The PSA is the cornerstone of crypto regulations in Singapore, specifically designed to govern the realm of digital payment tokens (DPTs). It mandates licenses for a spectrum of activities, including the operation of exchanges, buying and selling of DPTs, and providing wallets. Notably, the PSA introduces a nuanced approach with two distinct license types: standard and major. The categorization is based on transaction volume, ensuring a tailored regulatory approach. Additionally, the PSA provides exemptions for limited-purpose DPTs, encompassing non-monetary loyalty points and in-game items, recognizing the diversity within the crypto landscape. 2: Securities and Futures Act (SFA) In tandem with the PSA, the Securities and Futures Act (SFA) assumes a crucial role in regulating specific digital payment tokens (DPTs) in Singapore. It comes into play when DPTs exhibit features akin to capital market products such as securities or derivatives. The SFA mandates licenses for activities involving the dealing, offering, or underwriting of these DPTs. This underscores Singapore’s commitment to aligning cryptocurrency regulations with established financial market principles, ensuring that entities involved in crypto activities with characteristics resembling conventional financial instruments adhere to the regulatory standards set forth by the SFA. 3: Commodity Trading Act Expanding the Singapore crypto regulation umbrella, the Commodity Trading Act takes center stage when dealing with asset-backed DPTs in Singapore. Specifically, it applies to trading activities involving DPTs backed by assets, treating them as spot commodities. Entities engaging in such trading activities are obligated to obtain licenses to carry out these operations. This demonstrates Singapore’s proactive approach to regulating the diverse forms of cryptocurrencies, ensuring that even asset-backed tokens are subject to the appropriate regulatory scrutiny and oversight under the Commodity Trading Act. #aml #kyc #crypto

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The Monetary Authority of Singapore (MAS) 🇸🇬 has announced plans to advance asset tokenization in financial services through 𝐏𝐫𝐨𝐣𝐞𝐜𝐭 𝐆𝐮𝐚𝐫𝐝𝐢𝐚𝐧. Key points include: ✔️ MAS aims to form commercial networks, develop market infrastructures, foster industry frameworks, and enable access to common settlement facilities for tokenized assets. ✔️ Project Guardian has involved over 40 financial institutions 🏦 and policymakers across seven jurisdictions, conducting more than 15 industry trials in six currencies. ✔️ The Guardian Wholesale Network industry group has been formed by major banks to commercialize asset tokenization trials. ✔️ MAS launched the 𝐆𝐥𝐨𝐛𝐚𝐥 𝐋𝐚𝐲𝐞𝐫 𝐎𝐧𝐞 (𝐆𝐋1) initiative to develop foundational digital infrastructures for commercial networks. ✔️ Two industry frameworks were published: the 𝐆𝐮𝐚𝐫𝐝𝐢𝐚𝐧 𝐅𝐢𝐱𝐞𝐝 𝐈𝐧𝐜𝐨𝐦𝐞 𝐅𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤 (𝐆𝐅𝐈𝐅) and the 𝐆𝐮𝐚𝐫𝐝𝐢𝐚𝐧 𝐅𝐮𝐧𝐝𝐬 𝐅𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤 (𝐆𝐅𝐅) to guide tokenization implementation. ✔️ MAS is facilitating access to common settlement assets, including S$ wholesale CBDC, through a test network (SGD Testnet) for eligible financial institutions. 💡 These initiatives aim to improve capital raising, secondary trading, asset servicing, and settlement of tokenized assets while deepening liquidity across markets. Image Credit: MAS. #MAS #TheGuardian #tokenizedassets #liquisity #SGDTestnet #capitalraising Harry Lars Ghillemyn Güneş Ünüvar Tristan Husson Julien Choveton-Caillat Daniel Rodríguez Miguel

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Another milestone in this highly anticipated initiative that would have far reaching impact to the market. Please see the Hong Kong Monetary Authority (HKMA) post below for the latest updates. #Stablecoins #FRS

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