Singapore has built the rails for the token economy. Why aren't our SMEs on board?

By Ian Fong, VP Content at Money20/20 Asia

Singapore has major global and Singaporean banks running large-scale asset tokenisation trials right on our doorstep under Project Guardian. Yet there appears to be a striking gap between institutional experimentation and SME participation.

What's more, the U.S. SEC has now opened the door to on-chain trading of certain U.S. stocks, granting qualifying venues a temporary, conditional five-year exemption. Nasdaq is moving toward tokenised settlement for eligible securities, including Russell 1000 stocks, while the Depository Trust & Clearing Corporation (DTCC) is already using tokenised assets in collateral and other market infrastructure workflows.

The significance is not simply that another regulator is experimenting with blockchain. It is that some of the world's largest financial market infrastructures are now testing how tokenisation can reduce friction, improve settlement and unlock capital currently trapped by inefficient processes.

Meanwhile, right on our doorstep, the Monetary Authority of Singapore (MAS) has provided clear regulatory frameworks since 2018/19. Tier-1 banks are running significant asset tokenisation trials right here under Project Guardian.

The global institutional shift is becoming increasingly difficult to ignore. The question is no longer if this future is coming, but when. And that brings us to a less discussed question: why does there appear to be such a gap between institutional experimentation and participation by Singapore's SMEs?

We often look at this space microscopically, debating stablecoins, CBDCs, and STOs in isolated silos. But if we step back and look at the macro picture, these are not necessarily separate stories. They are components of a broader token economy.

As creatures of habit, we want to make sense of complex situations by breaking them down into digestible pieces so that we are able to understand why certain things are happening.

This is where the Token Economy gets complex and, at times, convoluted. What exactly is the Token Economy? Is it stablecoins, CBDCs, tokenised deposits, Security Token Offerings (STOs), crypto, NFTs or simply digital assets?

Well, it is all of the above — but more importantly, it is about how these different parts can come together to form an ecosystem.

Most of us are doing the little bits and working on isolated pieces without necessarily having the understanding of how all the above and more can come together to form the token economy.

But before we look at the whole token economy, the question remains: when will the token economy come into full effect, and how will it eventually happen? Let’s take one of the parts and components that make up this ecosystem: stablecoins.

Are stablecoins just for faster transactions, the ability to on- and off-ramp easily, and the exchange of value over digital infrastructure?

The answer is yes, but it’s more than that.

It’s no longer just about competing with existing payment rails on speed of transaction — 24/7. It’s no longer about providing better FX rates or instantaneous settlement. It’s also not just about having smart tokenised currencies filling in the ecosystem, although it is currently dominated by USD-pegged stablecoins.

It’s about the entire token economy.

Imagine how these stablecoins can fuel the growth of the token economy, almost like using smart currencies within this ecosystem. But is it just about transferring money?

The answer is no.

If it were only about transferring money, then some of our current traditional payment infrastructures are already doing a damn bloody good job.

It’s about funding and circulating value within the digital economy of the future. Stablecoins will function as a medium of exchange when you buy assets in the token ecosystem. It’s not just about getting stablecoins as a payment mode and a ramp to purchase things in the current physical world.

Then what are the things to buy in the on-chain ecosystem?

For many years, we spoke about the gaming industry, where the Web3 virtual world was the first use case example of how smart money can fund an ecosystem.

Eventually, through Real-World Asset (RWA) tokenisation and other forms of digital assets created in this world — including tokenised securities — this could become part of the future of our broader economy.

But this is where the conversation becomes more interesting for Singapore.

Tokenised securities are being offered or listed right now through Security Token Offerings (STOs). While the market is still at a nascent stage globally, Singapore has been building a regulatory foundation for digital assets and tokenised securities for several years.

And yet, the critical question remains: why is there still a limited interest and adoption among the actual SMEs in Singapore?

Perhaps the problem isn't the technology. Perhaps it isn't even regulation.

Perhaps the real friction sits much closer to the ground: awareness, perceived complexity, compliance costs, investor demand, lack of trusted infrastructure, uncertainty over liquidity — or simply the fact that SMEs don't yet see a problem that tokenisation solves for them.

But these are assumptions. And this is where we need to hear directly from the companies themselves.

So, it’s no longer about whether we want to just raise funds with STOs. It is about how prepared your firm is to survive and trade in a fully tokenised global economy. When these moving parts align commercially, you do not want to be the one scrambling to catch up. You want to be prepared to participate in a larger token economy — and potentially find new opportunities for your business as it develops.

We can speculate about what is holding our local ecosystem back. Or we can ask the companies themselves.