S&P Global Ratings Joins Singapore’s Project Guardian to Advance Asset Tokenization

S&P Global Ratings has announced its participation in the Monetary Authority of Singapore’s (MAS) Project Guardian, a collaborative initiative aimed at enhancing the liquidity and efficiency of financial markets through asset tokenization. This move marks another significant step in the rating agency’s commitment to supporting both traditional finance (TradFi) and decentralized finance (DeFi) clients.

Project Guardian, launched in May 2022, brings together policymakers and financial industry players to explore the potential of asset tokenization, particularly on public blockchains. The project has already attracted 24 members to its industry group, including major banks and asset managers, with S&P Global Ratings being the latest addition.

Chuck Mounts, Chief DeFi Officer at S&P Global Ratings, expressed enthusiasm about joining the project, stating, “This is another step forward in our commitment to leveraging our robust analytical and risk assessment capabilities to support both traditional finance and the growing universe of crypto-native decentralized finance clients.”

S&P Global Ratings will participate in Project Guardian’s Fixed Income workstream, focusing on developing analytic frameworks, assessments, and benchmarks for digital assets and tokenized markets. This aligns with the project’s broader goals of establishing standards, policy guidelines, and developing a commercially oriented digital asset ecosystem.

Andrew O’Neill, Digital Assets Analytical Lead at S&P Global Ratings, highlighted the transformative potential of digitalization in capital markets, citing recent innovations in digital bonds and tokenized treasuries. He emphasized the firm’s aim to bring its risk perspective and insights to support robust risk mitigation as this technology is applied in financial markets.

Project Guardian’s scope extends beyond fixed income, encompassing foreign exchange and wealth management on public blockchains, with a focus on network interoperability. The project employs a modular network model with four components and has already witnessed significant milestones, including JPMorgan’s live cross-border transaction using tokenized Singapore dollars and Japanese yen on the Polygon blockchain in November 2022.

As the race among rating agencies to build experience and clients in the tokenization space intensifies, S&P Global Ratings’ participation in Project Guardian could provide it with a strategic advantage. The firm has already made strides in this area, having taken on a DeFi client in 2022 and published stablecoin ratings late last year.