Deutsche Bank recently joined the Monetary Authority of Singapore’s Project Guardian, which focuses on asset tokenization in wholesale funding markets and decentralized finance applications. The project aims to explore various use cases of asset tokenization, including listing, distribution, trading, settlement, and asset servicing. Deutsche Bank’s decision to join came shortly after publishing a report on stablecoins, raising concerns about the transparency of leading issuers such as Tether. Tether responded by stating that the report lacked substantial evidence to support its claims. Deutsche Bank plans to contribute to the project by testing an open architecture and interoperable blockchain platform for servicing tokenized and digital funds. The bank will also propose protocol standards and work with Memento Blockchain, a software platform specializing in DeFi and digital asset management. Boon-Hiong Chan, Deutsche’s Asia Pacific head of securities and technology, will lead Project Guardian.
Deutsche Bank and Memento Blockchain previously collaborated on Project DAMA (Digital Assets Management Access) in 2022 and 2023, completing a successful proof-of-concept. This initiative aims to create a more efficient, secure, and flexible digital fund management and investment servicing solution. Deutsche plans to build on this foundation with the introduction of DAMA 2, employing the development of Interop Labs, the original developer of the Axelar network. In February, Ripple partnered with the Axelar Foundation to enhance interoperability on the XRP Ledger blockchain, focusing on advancing the tokenization of real-world assets. There has been a significant rise in real-world asset tokenization protocols over the past year, with over $8 billion in total value locked. Political parties are advocating for regulations to foster a positive environment for cryptocurrency. The UK Labor Party promises to continue efforts to make the UK a global hub for crypto asset technology, while the US is pushing for crypto in the upcoming election, with the Trump administration opposing the current Biden administration’s regulatory approach.
Investment bank Citi Group estimated that tokenized assets could be worth close to $4 trillion globally by 2030. In a report published in 2023, they cited a Labour-governed UK as a catalyst for this growth. The UK’s Labour Party plans to make the country a global leader in tokenization by clarifying laws and working with regulators to establish a regulatory regime for overseeing the technology. The US is also focused on crypto in the upcoming election, with the Trump administration looking to support the industry and prevent businesses from leaving the country. Deutsche Bank’s participation in Project Guardian and its collaboration with Memento Blockchain and other key players in the industry demonstrate the growing interest in asset tokenization and the potential for significant growth in the sector. With the rise of RWA tokenization protocols and the support of political parties and governments around the world, the future of asset tokenization looks promising.
