SBI Digital Markets to pilot tokenized ABS as part of Project Guardian

From ledgerinsights

Singapore’s SBI Digital Markets ( SBI DM ) has expanded its trials as part of the  Project Guardian  tokenization project. To ensure maximum distribution and liquidity, it is planning to issue tokenized asset backed securities (ABS) in both conventional and tokenized formats. We’ve reported on some of its  cross border collaborations  in which it has  connected  to regulated digital asset exchanges in other jurisdictions to maximize international liquidity.

In the next two months it plans to launch its first ABS, a structure noted backed by luxury wines. Subsequently, it’s planning ABS issuances based on intellectual property and commodities.

UBS money market fund across blockchains

Apart from the ABS, SBI DM also participated in the latest UBS money market fund (MMF) pilot. Last week  UBS Asset Management  announced the fund will go into production. However, as part of the latest pilot, it automated many of the functions of the tokenized money market fund, including subscription and redemption. SBI Digital Markets created a transfer agent smart contract to support fund transfers between different blockchains, using Chainlink’s Cross-Chain Interoperability Protocol (CCIP).

This year’s Project Guardian theme is commercialization. One of the earlier Project Guardian trials involved a repurchase agreement (repo) using a natively issued digital bond on a public blockchain. However, it wasn’t any  repo , it involved institutions spanning three jurisdictions – UBS in Switzerland, DBS in Singapore and SBI Securities in Japan. There was no central securities depository (CSD) involved. Last year SBI DM’s CEO Winston Quek,  shared details  in an interview.

As part of SBI’s commercialization push, there’s a follow up transaction relating to the repo involving a tokenized bond, with further details yet to be announced.

“This year, SBI Digital Markets has focused its efforts on building regulated frameworks to facilitate the end-to-end flow of tokenised securities,” said Winston Quek, CEO of SBI Digital Markets. “From origination, tokenisation, distribution, digital custody, listing on digital asset exchanges and building secondary trading – we have put in place workflows for efficient cross-border distribution networks whilst allowing for dual issuances in traditional and tokenised formats. We have adopted (an) open and interoperable architecture.”

Meanwhile, today the Monetary Authority of Singapore shared details about its latest  plans for Project Guardian  and tokenization. It outlined its vision for what’s required to support commercialization. In our interview with SBI’s Mr Quek, he talked about a paradigm shift that will take ten years to happen pervasively.