DigiFT, a Singapore-based digital assets exchange, has secured authorization from the Monetary Authority of Singapore (MAS) to operate collective investment schemes and serve as an “organized market” for secondary-market trading. Henry Zhang, the founder and CEO of the firm, shared that the exchange was granted the central bank’s Capital Markets Services (CMS) license on a recent Tuesday, coupled with a Recognised Market Operator (RMO) license received on December 1.
DigiFT earns MAS approval after an 18-month program
The MAS approval follows an 18-month process during which DigiFT actively participated in the central bank’s FinTech Regulatory Sandbox. Zhang emphasized that the platform holds the distinction of being the first exchange featuring an automatic market-making (AMM) mechanism to be admitted into the MAS FinTech Regulatory Sandbox. The AMM mechanism, a foundational protocol for decentralized exchanges (DEXs), eliminates the need for centralized exchanges, aligning with the broader trend in the industry towards decentralized infrastructure.
In the dynamic regulatory landscape of cryptocurrency in Singapore, Ravi Menon, Managing Director of MAS, recently asserted that “Cryptocurrencies have failed the test of digital money.” However, Menon also acknowledged the potential of blockchain technology beyond crypto speculation, highlighting the delicate balance Singapore seeks to achieve between regulation and innovation in the crypto space.
Zhang provided insights into the MAS regulatory process, noting that the central bank admits innovative business models to their regulatory sandbox to observe them within a controlled environment. Graduation from the sandbox is a prerequisite for obtaining full licenses. DigiFT’s unique position as the first regulated exchange on the public blockchain utilizing an AMM mechanism for secondary trading sets a precedent for the integration of cutting-edge technologies within established regulatory frameworks.
Visions for the future of trading on the blockchain
DigiFT’s platform, built on the Ethereum blockchain, is poised to offer secondary trading liquidity for security tokens backed by real-world assets such as bonds and equities. This innovative approach allows investors to subscribe, trade, and redeem on-chain assets using fiat currency or stablecoins. The inclusion of real-world asset tokenization underscores DigiFT’s commitment to advancing innovation in the digital assets space. The integration of an AMM mechanism by DigiFT reflects a broader industry trend toward decentralized exchanges.
This decentralized nature aligns with the core principles of blockchain technology, fostering transparency and security in the trading process. By streamlining decentralized exchanges, DigiFT contributes to reducing reliance on centralized infrastructure, addressing concerns related to security and control. As the regulatory landscape in Singapore continues to evolve, DigiFT’s MAS approval serves as a positive indicator of the country’s commitment to embracing technological advancements while upholding regulatory standards.
DigiFT’s recognition positions it as a trailblazer in the digital assets sector, providing a regulated avenue for the application of AMM mechanisms in secondary trading on the public blockchain. Looking ahead, DigiFT plans to continue pushing the boundaries of innovation, with a focus on exploring the tokenization of real-world assets. This forward-thinking approach aligns with the broader industry trend of leveraging blockchain technology to enhance efficiency and accessibility in traditional financial markets.
DigiFT’s recent MAS approvals mark a significant milestone in Singapore’s digital assets landscape. Positioned as the first regulated exchange on the public blockchain with an AMM mechanism for secondary trading, DigiFT contributes to ongoing discussions about the intersection of cryptocurrency regulation and technological progress.