By Richard Baker, Founder & CEO of Tokenovate.
Earlier this month I had the privilege to attend the FinTech Festival in Singapore. Organised by the Monetary Authority of Singapore (MAS), the event attracted more than 60,000 professionals from all over the world, discussing cutting-edge financial solutions, evolving regulatory landscapes and the latest technological innovations.
The breadth of innovation on display was both impressive and inspiring. The pace of digital financial transformation, often led by South East Asian countries, is breathtaking. Walking around the showfloor you could see advanced solutions for cross-border payments, tokenisation of real world assets (RWA), regulatory frameworks and environments that enable innovation safely, ESG and of course AI, along with specialised workshops and networking sessions for entrepreneurs, investors and developers alike.
After taking it all in, I wanted to single out three key themes that especially resonated with me:
New digital market infrastructure
The emergence and necessity of new distributed or digital market infrastructure was obvious. Today’s capital markets value chain is too fragmented and siloed, making efficient E2E execution and lifecycle management of a trade hard. The London Stock Exchange Group (LSEG) presented a compelling case for leveraging DTL/blockchain and digital assets to connect global liquidity to new revenue generation opportunities. This process would also lead to significant cost savings by improving operational efficiencies as well as faster creation of an ecosystem of value for all participants.
Acceleration of tokenisation
Tokenisation is of course not new. We wrote about it in this blog. But the speed of adoption is now accelerating. There are numerous use cases for tokenisation, from funds to fun. One example is Onyx by JP Morgan, which focuses on solving fragmentation and access by the automation of processes and deliveries, which in turn enables faster reconciliation, standardisation and reduction of failures. The energy and passion for the topic on display by Naveen Mallela, Global Head of Coin Systems, Onyx by J.P Morgan, was infectious.
Progress of Project Guardian
Project Guardian is a Singapore-led collaboration with policymakers and the financial industry that seeks to test the feasibility of applications in asset tokenisation and DeFi, while managing risks to financial stability and integrity. Several leading institutions are involved, including Citi, HSBC, UBS, Standard Chartered and SGX. The goals of Project Guardian include running industry pilots that assess longer-term transformational impact and ultimately establish policy guidelines and framework. Alan Lim, Fintech Infrastructure Office, MAS and other stakeholders of the project shared numerous “mega” updates and key learnings so far; the strong investor demand for tokenised RWAs, increasing overall confidence in tokenised digital assets, the need for centralised trusted parties, transparency and disclosure, and that up-to-date and suitable regulation and governance is essential to success.
As I returned home to the UK and a significantly colder Cambridge, I felt thrilled and excited about Tokenovate’s potential to contribute to the innovation ecosystem and thrive as a pioneer. I reflected on the significant impact embracing new digitisation technologies and techniques by MAS and the Singaporean government is having globally. They have successfully created regulatory sandboxes, established significant funding channels for innovative start-up hubs, and encouraged large enterprises to engage in numerous use cases.
There is no doubt in my mind that we will witness a massive transformation in financial services in the next few years. This will include the tokenisation of RWAs, the implementation of smart legal contracts, greater process automation of trade lifecycles, and the realisation of new revenue opportunities and cost savings. I am – WE ARE – excited to be at the forefront of this movement!