Singapore to test tokenized MAS Bills with CBDC
Introduction to Tokenised Financial Instruments
The Monetary Authority of Singapore (MAS) is taking a significant step forward in the realm of financial technology by initiating trials for the issuance of tokenised MAS Bills. This move marks an important milestone in the city-state’s journey towards a more digitised financial ecosystem. The trials will involve primary dealers and will utilise a wholesale central bank digital currency (CBDC) for settlements.
This initiative follows the successful completion of the first live interbank settlements using wholesale CBDC by major banks such as DBS, OCBC, and UOB. Further details about the trial are expected to be announced next year, offering a glimpse into the future of financial transactions in Singapore.
Key Insights from Chia Der Jiun
Chia Der Jiun, Managing Director of the MAS, highlighted these developments during his keynote speech at the Singapore FinTech Festival 2025. He emphasized that this phase represents a critical step in Singapore’s tokenisation efforts. Financial institutions have already started issuing bonds on the blockchain, but the adoption rate remains uneven across different sectors.
He pointed out that while money market funds have been tokenised and major banks offer tokenised cash management services to corporate treasuries, the broader adoption of asset-backed tokens is still in its infancy. “Have asset-backed tokens achieved escape velocity? Not yet,” he remarked, indicating the need for more widespread acceptance and utility.
Challenges and Opportunities in the Tokenisation Landscape
One of the key concerns raised by Chia is the risk of creating isolated systems if institutions continue to develop their own closed networks due to varying specifications. This could lead to a fragmented landscape or even a few monopolies, posing concentration risks. To mitigate this, the MAS is working with global policymakers and industry players under ‘Project Guardian’ to establish common standards for tokenised funds, bonds, and foreign exchange transactions.
Additionally, the MAS is promoting network interoperability to ensure that different systems can work together seamlessly. Chia also mentioned the launch of the Global Layer One toolkit, which provides 108 controls for network operators to assess whether their blockchain infrastructure meets regulatory and market expectations.
Regulatory Framework and Market Expectations
In line with these initiatives, the MAS plans to publish a guide detailing the regulatory treatment of tokenised capital markets products. This guide will address critical issues such as investor rights, smart contract governance, and settlement finality.
Chia noted that the concept of money in a tokenised environment is still in its early stages, with only a few options currently qualifying as safe and reliable settlement assets. These include CBDCs, tokenised bank liabilities, and regulated stablecoins. Market participants are experimenting with different settlement assets for various use cases, each needing to demonstrate value through utility and safety.
Institutional-Grade Blockchain Networks
Institutional-grade blockchain networks were another focus area during the speech. Wholesale tokenised transactions require clear governance, secure and reliable performance, predictable fees, privacy, optionality, settlement finality, and regulatory compliance—features not always found in public, permissionless networks.
AI Integration in Financial Operations
Chia also discussed the growing integration of artificial intelligence (AI) in financial operations. From information retrieval and multilingual customer service to software development, market analysis, underwriting, and fraud detection, AI is becoming increasingly prevalent. An emerging area of application is the use of autonomous agents in more complex processes.
“There are also projects to develop consumer agents that collect information and execute transactions, but agentic autonomy must come with sufficient guardrails,” he said. To support safe adoption, the authority will publish a new set of principles-based supervisory guidelines for consultation, covering governance and controls across the AI lifecycle.
New Initiatives for AI Development
In addition to these guidelines, ‘Project MindForge’ will also be publishing an AI risk management executive handbook today. This handbook outlines the key components of good AI risk management.
Chia also announced BuildFin, a new initiative aimed at solving shared AI challenges. Its first project is a financial-sector voice-to-text model capable of transcribing Standard Singapore English, or Singlish, and mixed-language conversations. Existing large language models are not fully ready to handle these tasks, according to Chia.
