Deutsche Bank, a multinational investment bank from Germany, is partnering with the Monetary Authority of Singapore (MAS) on the tokenization of assets. The collaboration is part of MAS’s Project Guardian, which focuses on asset tokenization in wholesale funding markets and decentralized finance (DeFi) applications. Deutsche Bank will be testing an open architecture and interoperable blockchain platform to facilitate the service of tokenized and digital funds. The bank will also propose protocol standards and determine the best approach to contribute to industry progress.
Boon-Hiong Chan, Deutsche Bank’s Asia Pacific head of securities and technology, will lead the bank’s involvement in Project Guardian. They will work closely with Memento Blockchain, a software-based platform targeting DeFi and digital asset management. Deutsche Bank and Memento Blockchain previously collaborated on Project DAMA, a proof-of-concept for digital asset management access.
The aim of these initiatives is to create a more efficient, secure, and flexible solution for digital fund management and investment servicing. Deutsche Bank is now working on DAMA 2, which will involve Interop Labs, the original developer of the major interoperable blockchain, the Axelar network. Ripple, among other major cryptocurrency firms, has also been working with the Axelar Foundation to add interoperability to their blockchain networks. In February 2024, Ripple announced a collaboration with Axelar to tokenize real-world assets on the XRP Ledger.
According to Sergey Gorbunov, the co-founder of Axelar and CEO of Interop Labs, secure blockchain interoperability is necessary to unlock the trillion-dollar potential in asset tokenization. He believes that Deutsche Bank and Project Guardian are leading the way in establishing the open systems needed for this technology. Gorbunov sees Axelar as critical infrastructure for institutional adoption and is excited about the collaboration with Deutsche Bank.
Project Guardian was initiated by MAS in 2022 and involves collaboration between MAS and other financial market players, such as the Financial Conduct Authority of the United Kingdom, the Financial Market Supervisory Authority of Switzerland, and the Financial Services Agency of Japan.
Deutsche Bank’s involvement in Singapore’s tokenization project comes shortly after the bank released a report on stablecoins, raising concerns about the transparency of major issuers like Tether (USDT). Tether responded by criticizing Deutsche Bank, stating that the report lacked substantial evidence or concrete data to support its claims. Tether’s USDT stablecoin is a significant player in the cryptocurrency market, accounting for the largest share of trades and having a total market value of nearly $111 billion.