The Monetary Authority of Singapore (MAS) has unveiled ambitious plans to issue tokenised bills settled in wholesale central bank digital currency (CBDC) by 2026, a significant leap towards a robust tokenised financial ecosystem. This revelation was made by Managing Director Chia Der Jiun during his keynote address at the Singapore FinTech Festival 2025, where he also touched on forthcoming stablecoin regulations, indicating a critical evolution in the future of finance.
Tokenised MAS Bills and CBDC Trials
As part of its strategy to modernise financial operations, MAS will commence the issuance of tokenised MAS Bills, specifically designed for primary dealers. These bills will be settled using Singapore dollar-denominated wholesale CBDC—a groundbreaking initiative that promises to facilitate more efficient transaction processes. “In the CBDC space, I am pleased to announce that the three Singapore banks—DBS, OCBC, and UOB—have successfully conducted interbank overnight lending transactions using the first live trial issuance of Singapore dollar wholesale CBDC,” stated Chia, signalling optimism about forthcoming trials in 2026.
This push towards adopting CBDCs is part of a broader vision to integrate digital currencies into everyday financial operations. The excitement surrounding these trials reflects a growing recognition of how CBDCs can enhance transaction efficiency, reduce settlement times, and even contribute to greater financial inclusion.
Stablecoin Regulatory Framework
In tandem with technological advancements, MAS is also preparing to introduce a comprehensive regulatory framework for stablecoins. Chia emphasized the importance of “sound reserve backing and redemption reliability,” highlighting a clear differentiation between regulated and unregulated stablecoins. He remarked, “Recurrent de-pegging can erode confidence, and trigger runs on other stablecoins,” drawing parallels to the financial instability seen during the 2008 money market fund crisis. Such vulnerabilities underline the necessity for robust oversight in the realm of stablecoins.
The MAS’s forthcoming legislation aims to mitigate risks associated with unregulated stablecoins, rendering them unsuitable for large wholesale transactions. The urgency for regulation stems from the potential adverse effects poorly governed digital currencies could have on overall market stability, reinforcing MAS’s commitment to fostering a secure financial landscape.
Progress and Benefits of Tokenisation
Tokenisation is reshaping the financial services industry by enabling assets to be represented digitally, fostering fractional ownership, and streamlining transaction processes. Chia referred to these digital manifestations as “asset-backed tokens,” which are poised to revolutionise capital markets through innovative offerings such as security token offerings (STOs). “Tokenisation has lifted off the ground. But have asset-backed tokens achieved escape velocity? Not yet,” he acknowledged, pointing to the nascent stage of this transformative technology.
The potential benefits of tokenisation are vast, including improved liquidity in asset markets and cost reductions in operations. Additionally, the capacity to automate asset exchanges and transactions not only enhances efficiency but also encourages wider participation—especially from retail investors—allowing them fractional access to high-value assets that were previously out of reach. This innovation paves the way for a more accessible financial landscape where value can be easily exchanged and managed.
Collaboration and Standardisation Efforts
To facilitate the growth and acceptance of tokenised financial assets, MAS is actively collaborating with international partners and industry players to cultivate a standardised and interoperable financial ecosystem. “Right now, banks and innovators are building their own networks and racing to scale,” Chia noted, underscoring the imperative for unified standards across platforms. The concern is that differing technical specifications could lead to a fragmented market, resulting in inefficiencies and diminished liquidity.
Initiatives like Project Guardian and BLOOM are at the forefront of these collaborative efforts, allowing stakeholders to experiment with tokenised bank liabilities and regulated stablecoins for settlements. Chia stressed, “This means that they need to agree on common standards for asset-backed tokens even as they compete to scale,” highlighting the need for a balanced approach to cooperation and competition within the industry.
Future Regulatory and Market Developments
Anticipated advancements in tokenisation will be bolstered by MAS’s commitment to enhancing cross-border regulatory cooperation for systemic stablecoins. By also publishing a guide on tokenisation of capital markets products, MAS is addressing fundamental gaps in understanding and operational functionality that market participants face. This guide aims to provide practical case studies, fostering confidence and facilitating clearer regulatory pathways for emerging technologies.
Moreover, as MAS continues to promote institutional-grade networks characterized by security and compliance, tools such as the GL1 Market Infrastructure Toolkit are being employed to ensure blockchain networks adhere to international regulatory standards. This infrastructure will serve as a backbone for future financial innovations, reinforcing the importance of governance and security in the era of digital currencies.
Building the Future of Finance
The MAS’s vision for a tokenised financial future is akin to crafting an intricate canal—a connected system where standards and interoperability flow smoothly. Collaboration between public and private sectors is essential to navigate the complexities of tokenisation and to realize its potential. As Chia conveyed, “The tokenised future should pool liquidity, minimize frictional costs, and improve cash and collateral management.” This holistic approach is critical for enabling efficient investments, optimizing processes, and facilitating seamless cross-border transactions.
Ultimately, the announcements made at the Singapore FinTech Festival are not just about maintaining competitive advantage but about creating a resilient financial system that nurtures innovation and fosters trust. As Singapore positions itself as a leading financial hub in the evolving landscape of digital finance, the concerted efforts towards regulatory clarity and collaborative standardisation will pave the way for a thriving and secure future in tokens and CBDCs.
