Singapore’s central bank will step up work on wholesale central bank digital currencies (CBDCs) and stablecoin regulation as tokenised financial markets develop, with the Monetary Authority of Singapore (MAS)’s managing director saying central bank money will ultimately be needed to anchor monetary stability.
Chia Der Jiun said preparations for central bank digital currencies (CBDCs) could begin while tokenised assets and private forms of digital money remain at an early stage of development.
As the use of privately issued digital money expands, CBDCs will play a role in preserving monetary stability and providing certainty in settlement, he said.
“Tokenised transactions will only scale if they are settled using safe and trusted digital money,” Chia said in a keynote address at the INSEAD Digital Finance & Agentic AI Summit on Friday.
MAS has made wholesale Singapore dollar central bank digital currency available through its Singapore dollar Test Network, which became operational in 2025.
The first successful trial involved the settlement of interbank overnight lending transactions between DBS, OCBC, and UOB.
The central bank is now preparing to use wholesale CBDC to settle tokenised MAS bills, bringing tokenised assets and central bank digital currency together on common infrastructure.
The initiative aims to provide greater certainty and finality in transactions.
MAS has also consulted on legislative amendments to implement its proposed Single-Currency Stablecoin framework.
The framework includes safeguards covering reserve backing, capital requirements, redemption at par and disclosure, while addressing cross-border issuance and recognition of foreign stablecoins regulated under comparable regimes.
Chia said tokenised bank deposits, regulated stablecoins and CBDCs could serve different purposes, depending on the needs of users and markets.
Deposit tokens may be suited to banking-related activities such as cash management and payments, while stablecoins could gain wider adoption on cryptocurrency exchanges and in fintech payments.
However, privately issued digital money must remain anchored in a trusted monetary system.
Commercial bank deposits maintain parity with central bank money through their convertibility into central bank reserves, while stablecoins depend primarily on the transparency and adequacy of their reserve assets.
Chia said additional regulatory requirements and access to central bank reserves could be considered for stablecoins that eventually become systemically important.
Tokenisation faces challenge of commercial adoption
Beyond digital money, MAS is working with financial institutions to move asset tokenisation from experimentation towards wider commercial use.
Through Project Guardian, the central bank has worked with industry participants to test tokenisation across asset classes and develop common standards and practices.
Chia said adoption would require financial institutions to coordinate their approaches to asset servicing, disclosure, interoperability and risk management.
Although tokenisation has advanced in areas such as bond issuance, private credit, corporate debt, equities, precious metals and money market funds, activity remains small relative to conventional markets for these assets.
Repo transactions offer a potential use case, as tokenisation could coordinate securities transfers, cash movements, collateral valuation and other processes on compatible infrastructure, reducing repeated reconciliation between participants.
The challenge is extending these benefits beyond individual institutions and closed networks. Chia said customers, counterparties, and financial market infrastructure would need to move together for tokenised markets to achieve scale.
MAS is also working through Global Layer One, an industry collaboration platform intended to support cross-border transactions in tokenised assets.
Its initiatives include a Market Infrastructure Toolkit to assess digital financial infrastructure against international standards and a Programmable Compliance Toolkit to embed regulatory requirements into digital infrastructure.
Chia said financial markets were unlikely to converge on a single global ledger. Instead, the industry would need to connect multiple platforms and networks while maintaining appropriate governance, resilience, risk controls, and regulatory compliance.
MAS advances safeguards for AI-driven finance
Chia also highlighted the implications of artificial intelligence agents that could act on behalf of individuals and institutions, including initiating and executing financial transactions.
Such agents could increase the speed at which money moves in response to relatively small differences in benefits and incentives, requiring financial institutions to sharpen their value propositions and improve how they communicate with both customers and their AI agents.
The technology also raises questions around authority, permissions, identity, accountability and governance, particularly where agents can execute transactions within financial institutions’ systems.
Earlier this year, MAS and industry participants published the Safeguards for Agentic Finance at Runtime (SAFR) white paper, setting out a framework for governing AI agents during execution.
The framework covers agent identity and authorisation, checks against a user’s mandate before actions are executed, and mechanisms for accountability and auditability.
MAS has since published version 1.1 of the white paper, incorporating contributions from a broader group of financial institutions and AI developers.
The Future of Finance Institute has also released an open-source reference implementation to support industry testing and development.
Chia said public-private collaboration would remain essential as digital finance evolves, with common standards, sound regulation and trusted infrastructure needed to support adoption across tokenised assets, digital money, and AI-enabled financial services.