Japan's SBI and Singapore join hands to promote global tokenization assets, can wine also be put on the chain?

SBI Deepens Cooperation in the Digital Market in Singapore, Advancing Tokenization of Securities

SBI Digital Markets (SBIDM) in Japan has strengthened its role in the Monetary Authority of Singapore's (MAS) 'Project Guardian' and launched a new pilot program aimed at promoting global market tokenization of securities applications. SBIDM is collaborating with leading Financial Institutions to develop a cross-border framework for tokenized assets, connecting regulated digital asset exchanges across multiple regions to enhance liquidity and reduce costs.

Through the Fixed Income Pilot Program, SBIDM is building an international network focused on the tokenization of asset-backed securities, covering initial issuance and secondary trading. SBIDM announced on November 4th its plans to release the first structured notes backed by luxury wine assets in the coming months, followed by products related to intellectual property and commodities.

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Initial luxury wine promissory notes attract a wide range of investors

These securities will be offered in traditional and digital form to attract a wide range of investors and adopt the unalterable infrastructure of blockchains, aiming to support global transactions. At the same time, the asset and wealth management pilot program in cooperation with UBS Asset Management is evaluating UBS's tokenization currency market funds.

The pilot program is built on the technical progress of 'Project Guardian' last year, integrating blockchain-driven automation to simplify the subscription and redemption process of funds. With the help of Chainlink's Cross-Chain Interaction Interoperability protocol, Smart Contract optimizes interactions within the fund while reducing operating costs. SBIDM describes this innovation as a 'fundamental transformation' of the up to $63 trillion mutual fund industry.

The combination of public and private blockchains promotes the global tokenization asset development

This is all part of MAS's broader vision for institutional digital asset adoption under 'Project Guardian', which leverages both public and private Blockchain technologies. Public Blockchains are open and permissionless networks where anyone can join, validate transactions, and view the ledger. They are decentralized, typically relying on large distributed networks to ensure security, such as Bitcoin (BTC) or Ethereum.

On the contrary, private Blockchains are closed and require permission to access. Access is limited to selected participants, usually controlled by a central entity or group. SBIDM's efforts have joined other important participants in expanding the tokenization industry in the region, including Standard Chartered Bank. Standard Chartered is exploring the use of tokens on public blockchains such as Ethereum and Stellar for digital bond issuance.

HSBC is collaborating with Temasek to test the use of private Blockchain tokenization sustainable bonds to maintain compliance with financial regulations. As a long-term partner of 'Project Guardian', JPMorgan has also tested tokenization deposits on public and private Blockon-chain to improve cross-border transaction and Settlement efficiency of tokenization portfolios.

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Expected Impact and Future Outlook

The collaboration between SBI and Singapore is expected to have a profound impact on the global tokenization asset market. SBI has not only expanded the range of options for investors but also opened up new pathways for the tokenization of physical assets. With more Financial Institutions participating in 'Project Guardian,' tokenized assets are expected to gain broader recognition and adoption globally.

In the future, SBI plans to continue developing tokenization products related to intellectual property and commodities, further expanding its product portfolio. These efforts will help achieve market efficiency and transparency, providing investors with a safer and more convenient investment environment. At the same time, through cooperation with global Financial Institutions, SBI is expected to play a key role in the global tokenization asset market, promoting industry innovation and development.