Japanese and Singaporean regulators join forces on crypto pilot project

On June 26, Japan’s financial regulator, the Financial Services Authority (FSA), announced a partnership with the Monetary Authority of Singapore (MAS) for the joint regulation and pilot testing of cryptocurrency projects in accordance with the latter’s “Project Guardian” initiative. The participation will be limited to observer capacity for the FSA in its current phase. The regulators wrote: Established in May 2022 by the MAS, Project Guardian seeks to test the “feasibility of applications in asset tokenisation and DeFi,” in accordance with proper regulations. The project has four areas of focus — open and interoperable networks, trust anchors, asset tokenization and institutional-grade DeFi protocols. In one notable project from the initiative: Meanwhile, HSBC, Marketnode and UOB have since concluded a pilot test of a blockchain-structured product, while UBS is exploring the issuance of Variable Capital Company funds on digital asset networks. Project Guardian isn’t the first collaboration between the FSA and MAS. In 2017, the two regulators established a joint fintech cooperation framework to promote innovation in their respective markets. The collaboration also follows a period of relaxation on crypto laws in Japan. On June 25, Cointelegraph reported that Japan’s National Tax Agency ruled to exempt token issuers from a 30% tax on unrealized capital gains. Earlier this year, Japanese prime minister Fumio Kishida said that decentralized autonomous organizations and nonfungible tokens could help support the government’s “Cool Japan” strategy as it explores Web3 usage. Magazine: Guide to Osaka, Japan’s second-biggest city