Project Guardian report explores potential of tokenised bank liabilities
A new report published under the Monetary Authority of Singapore’s Project Guardian initiative suggests tokenised commercial bank money could significantly reduce friction in cross-border payments and FX settlement.
But while the technology offers clear operational efficiencies, it remains in early-stage experimentation with key legal and governance hurdles still unresolved.
The report, led by Ant International and supported by ISDA, BNY Mellon, OCBC, HSBC and others, outlines how tokenised bank liabilities could simplify multi-currency settlement by enabling atomic, programmable transactions over shared ledger systems.
According to the paper, “Tokenisation and shared ledger infrastructure have great potential to alleviate some of the pain points faced by market participants.”
Solving legacy issues in FX operations
Tokenised bank liabilities, defined in the report as digital representations of bank money on a shared ledger, are framed as a practical alternative to both stablecoins and CBDCs. Unlike retail-focused digital currencies, these instruments are designed for wholesale use between regulated institutions.
The report notes that current cross-border flows are still “bound either by market opening hours or requiring alternative arrangements which typically come with additional fees.”
These time constraints, combined with fragmented settlement layers and inconsistent regulatory frameworks, often lead to delays, increased costs, and liquidity traps for institutions managing 24/7 obligations.
Programmable settlement through shared ledger infrastructure, it argues, would offer 24/7 availability and the potential for instant, risk-mitigated FX delivery across jurisdictions.
Private sector projects show early promise
Three case studies are included to demonstrate how tokenised money might function in practice. In one example, Ant International used tokenised bank liabilities to simulate the real-time exchange of deposits issued by different banks in separate currencies, processed over a common ledger with delivery-versus-payment logic.
The report states these pilots “demonstrate that scalable and interoperable solutions can be developed in anticipation of tokenised assets market growth.” However, it stops short of presenting a definitive roadmap to commercial deployment.
Standardisation and adoption remain major obstacles
Despite highlighting potential efficiencies, the report is cautious about current readiness. It acknowledges the lack of a “generally accepted industry-wide framework facilitating the adoption of tokenised bank liabilities” and outlines several areas requiring further alignment, including documentation, legal finality, and interoperability.
It also notes that meaningful implementation “will require a sufficient number of participants to commit to the development and adoption of interoperable solutions.”
This points to a more systemic challenge: even if the technical architecture proves sound, industry consensus around operating models and governance will be essential.
