Friday,21 June 2024

Winston Quek, SBI Digital Markets: “Let’s not tokenise for the sake of tokenising”

5 min read

Interviewed By Foo Boon Ping and Kumardev Chatterjee

SBI has completed a technical pilot as part of MAS's Project Guardian, diving into asset tokenisation and DeFi, highlighting the importance of regulatory adherence and collaborative ecosystem dynamics

SBI Digital Markets joined forces with UBS Asset Management in a technical pilot under the Monetary Authority of Singapores (MAS) Project Guardian. This initiative explores the potential of asset tokenisation and decentralised finance (DeFi) while maintaining financial system stability and integrity.  

A subsidiary of SBI Digital Asset Holdings, SBI Digital Markets conducted the project on the Ethereum network within a permissioned environment, testing various scenarios involving fund managers, distributors, and digital asset custodians. Smart contracts played a pivotal role in automating and streamlining subscription and redemption processes for fund shares. 

Fernando Luis Vázquez Cao, CEO of SBI Digital Asset, underscored the transformative convergence of tokenisation, distributed ledger technology, and traditional finance, likening it to the early days of the internet before the world-wide webs transformation. Winston Quek, CEO of SBI Digital Markets, emphasised the importance of collaborative partnerships in this journey, seeing tokenisation as a means to democratise asset ownership, enhance efficiency, and drive cost savings across financial and securities markets. 

He said: Its almost impossible to be able to do this by ourselves. One of our ethos is to always look for motivated partners able to come along on this journey. 

Quek sees tokenisation as more than just digitalising assets,explainingthat tokenisation and smart contracts will also mean cost savings in market and asset services covering listing, trading, settlement and custody, as well as post trade processing. He cautionedLets not tokenise for the sake of tokenising. 

The collaborations noteworthy aspect is the strong partnership between regulated financial institutions and national regulators, including Japans Financial Services Agency, the Swiss Financial Market Supervisory Authority, the UKs Financial Conduct Authority, and MAS. This fosters innovation and supports financial digitalisation. 

Singapores role as a global hub for projects like these is in no small part thanks to the country’s ability to establish regulatory frameworks and bridges between blockchain networks and legacy payment systems. The conclusion of the pilot sets the stage for future collaborations, with SBI Digital Markets planning to expand its ecosystem by working with 15 institutions under Project Guardian to explore commercialisation models for tokenised funds in the next 12 to 18 months. 

Quek envisions a future where capital markets leverage digitalisation and efficiency-enhancing technologies to unlock data and cost efficiencies. The pilot marks the beginning of ambitious global partnerships with the ultimate goal of establishing an open and interoperable network for digital assets worldwide.

Institutions: SBI Digital Markets, SBI Digital Asset Holdings, Monetary Authority Of Singapore, UBS Asset Management, JFSA, FINMA, FCA
Country: Singapore, Japan, Switzerland, United Kingdom
People : Fernando Luis Vázquez Cao, Winston Quek
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