HSBC, JPMorgan, MUFG, SocGen, Stanchart tie up to boost tokenised financial markets infrastructure

[SINGAPORE] Five global banks have set up a Singapore-based non-profit organisation to boost infrastructure for tokenised financial markets.

Called the Global Layer One Organisation (GL1 Org), the initiative will see HSBC, Kinexys by JPMorgan, MUFG, Societe Generale-Forge and Standard Chartered come together to support the development and adoption of common standards and frameworks for tokenised financial markets, the five banks said in a joint release on Wednesday (Nov 4).

Ruby Ho, managing director and head of markets and securities services for Asean at HSBC, said: “Tokenisation can help make financial markets faster, more efficient and more connected, but those benefits will only be realised if clients can trust the underlying infrastructure.”

Common approaches can help financial institutions navigate the increasingly diverse ecosystem and operate across different infrastructures with greater confidence, especially as tokenisation gains momentum globally, the organisation said.

GL1 Org builds on the Monetary Authority of Singapore’s (MAS) GL1 initiative, which explores the development of a shared ledger infrastructure that could allow regulated financial institutions across jurisdictions to deploy tokenised assets.

Since its launch, GL1 has developed a framework of controls to assess suitability of market infrastructures and support market participants in designing their infrastructure.

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It has also developed a structured approach to embedding regulatory and policy requirements into digital financial infrastructure.

GL1 Org will support the continued development and adoption of these frameworks while advancing common approaches that promote trusted and interoperable digital financial infrastructure.

It will also support efforts to facilitate connectivity across institutions, infrastructures and jurisdictions.

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The organisation said it welcomes participation from financial institutions, policymakers, market infrastructure providers, fintechs and other stakeholders across countries and jurisdictions.

Patrick Lee, CEO for Singapore and Asean and South Asia at Standard Chartered, said: “We believe that tokenisation and distributed ledger technologies are foundational for the evolution of financial services.

“With various digital financial market infrastructures emerging for digital assets across public and private chain networks, the establishment of policy, regulatory and market infrastructure standards is critical for interoperability and for supporting further scaling of development and adoption globally.”