Moody’s partners with MAS project Guardian for tokenization initiative

Moody’s has announced a partnership with the Monetary Authority of Singapore’s Project Guardian. This collaboration aims to enhance market efficiency through a public-private tokenization initiative.

Wendy Cheong, Managing Director and Regional Head of Asia-Pacific for Moody’s Ratings says, “Moody’s is entering a new era of brand identity, innovation, and collaboration, and we’re proud to be part of this project at the forefront of asset tokenization.”

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The company intends to offer risk analysis for Project Guardian, which began in 2022. Moody’s will examine fixed-income products such as stablecoins, tokenized deposits, fractionalized funds, and other digital asset securities.

Moody’s risk assessment aims to improve market transparency, mitigate systemic risks, and support the development of the tokenization industry.

Project Guardian is a testament to the power of transparency in the financial industry and as we join other leaders in this initiative, we are excited about the potential of tokenization to transform the financial landscape […] At Moody’s, we are committed to paving the way for these advancements and contributing to a more efficient and transparent market.

Fabian Astic, Managing Director and Global Head, Digital Economy, Moody’s Ratings.

Tokenization is gaining traction as a growing sector that has caught the interest of major global financial firms. They view it as a way to enhance transparency and efficiency in investing by representing “real-world assets” as digital tokens on-chain.

Moody’s joins the tokenized funds market trend

According to a report by Moody’s on Jan. 15, the value of tokenized funds saw significant growth, reaching approximately $800 million by the end of 2023. This surge was driven by the growing trend of tokenizing U.S. Treasuries. 

Today, that amount has surpassed $1.5 billion. Leading firms such as BlackRock, Franklin Templeton, and UBS Asset Management have embraced the use of tokenized funds on public blockchains.

Project Guardian is a long-term initiative that brings together policymakers from around the world, such as the United Kingdom’s FCA, Switzerland’s FINMA, and Japan’s FSA, along with prominent financial institutions like Deutsche Bank, Citi, and Apollo. The initiative is currently conducting pilot programs in the fixed-income, wealth management, and foreign exchange sectors.