Innovation update · June 2026

Tokenised VCC sub-funds: Project Guardian moves from pilot to production

MAS's Project Guardian has matured from industry experiment to the de-facto rulebook for tokenised fund issuance in Singapore. For VCC managers thinking about an on-chain sub-fund, this is what 2026 actually looks like.

MCReviewed by Marcus Cheong, Editorial Lead · Updated June 2026
Analysis based on public MAS Project Guardian materials and industry deployments through June 2026. General information, not legal, tax or investment advice.
May 2022Project Guardian launched
40+industry participants by 2026
4 yearsof pilots across funds, FX, fixed income
VCC sub-fundthe issuance vehicle of choice

What Project Guardian actually is

Project Guardian was launched by MAS in May 2022 as an industry collaboration on tokenised real-world assets. It is not a regulation. It is a structured set of pilots, working groups and technical workstreams that bring together MAS, the major Singapore banks (DBS, UOB, OCBC, Standard Chartered), global asset managers (BlackRock, Franklin Templeton, Schroders, UBS Asset Management among others) and Web3 infrastructure providers around concrete production-grade use cases.

By 2026 the project has run pilots across four areas:

  • Asset and wealth management — tokenised fund-share issuance, on-chain primary subscription and redemption.
  • Fixed income — tokenised bonds and bond funds with 24/7 settlement.
  • Foreign exchange — cross-border FX swaps and tokenised deposits.
  • Trade finance — tokenised invoices and supply-chain settlement.

None of this is novel infrastructure. What Guardian gave the market was a sanctioned reference architecture: how to build a permissioned ledger, how to design tokenised share classes that survive a MAS exam, how to evidence AML controls on an on-chain issuance, how to run a transfer agent in a hybrid setup.

Why the VCC sub-fund is the issuance vehicle of choice

The VCC Act doesn't prescribe the form of the share register. Shares can be recorded on a permissioned ledger so long as the VCC, its manager and its transfer agent satisfy the underlying obligations. That makes the VCC unusually well-suited to tokenisation compared with rigid fund structures elsewhere.

Three specific features matter:

  • Sub-fund segregation. A tokenised share class can sit as a dedicated sub-fund under an existing umbrella VCC. The tokenisation experiment is ring-fenced from the rest of the manager's book — see how umbrella ring-fencing works.
  • Variable capital. The structure was designed for continuous redemption and creation. On-chain subscription and redemption mechanics map onto the existing capital-account framework without contortion.
  • Restricted offer. Most Project Guardian pilots have been restricted to accredited and institutional investors. The VCC's default offering posture (private placement to AI/II) lines up with where MAS is comfortable seeing tokenised securities sit today.

Where production deployments actually are

The honest picture in 2026:

  • Tokenised money-market funds. The most-deployed live use case. Several Singapore-domiciled MMFs now offer tokenised share classes, used by treasury teams and prime brokers for on-chain collateral. The operational case — near-instant settlement, 24/7 mobility, programmable repo — is real.
  • Short-duration fixed income. Tokenised T-bill and short-duration credit funds are live with multiple managers, again primarily as collateral instruments.
  • Private-market tokenisation. Pilots, not flow. The illiquidity case — "fractionalise private equity" — runs into the secondary-market problem: who is on the other side? Real adoption is small relative to the broader VCC base.
  • Tokenised deposits and stablecoins. Not VCC-issued, but the rails that on-chain VCC fund flows ride on. The MAS Stablecoin Framework (finalised 2023) and the live Singapore-dollar tokenised deposit rails are why this category works at all.

What MAS expects from a tokenised VCC issuance

Project Guardian materials don't override existing rules. The expectations that have crystallised:

  • Independent custody for fund assets — restated in IID 04/2025. For tokenised securities that means a MAS-licensed digital-asset custodian or a bank with a tokenised-securities mandate. Self-custody is not the expected default.
  • Permissioned ledger or whitelisting. AI/II eligibility is checked at the wallet level. Transferable to the wrong counterparty equals an AML breach.
  • Transfer-agent equivalence. The on-chain register has to function as the official register of members for VCC Act purposes. Most live deployments use a hybrid — on-chain settlement, off-chain golden record at the administrator.
  • AML/CFT continues to sit with the VCC. Tokenisation doesn't shift the obligation under MAS Notice VCC-N01. The EFI's KYC framework has to extend to wallet-level checks and travel-rule compliance.

Who this matters most for

  • Existing VCC managers exploring whether to add a tokenised share class to an existing sub-fund — lower-risk entry point than launching a tokenised-native fund.
  • Money-market and short-duration fixed-income managers — the operational case is strongest here and competitors are already live.
  • Fund administrators — tokenisation isn't disintermediating you, but it is reshaping what you actually do day to day. Hybrid on-chain/off-chain reconciliation is the new core capability.

Considering a tokenised VCC sub-fund?

Tell us the strategy and the share class you want to tokenise. We'll connect you with a MAS-licensed fund manager and a service-provider set-up that has executed under Project Guardian.

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What is Project Guardian?

Project Guardian is MAS's industry collaboration on the design and deployment of tokenised real-world assets and funds. Launched in May 2022, it has run pilots across asset management, FX, wealth and fixed income with the major Singapore banks, global asset managers and Web3 infrastructure providers. By 2026 it has effectively become the de-facto Singapore rulebook for tokenised fund issuance.

Can a VCC issue tokenised fund shares?

Yes. The VCC Act doesn't prescribe the form of the share register — shares can be issued and recorded on a permissioned ledger so long as the VCC, its manager and its transfer agent satisfy the underlying obligations under the VCC Act, MAS Notice VCC-N01 and applicable AML and securities rules. Several Project Guardian pilots used VCC sub-funds as the issuance vehicle.

Who is custodying tokenised VCC fund shares?

MAS's expectation, restated in Circular IID 04/2025, is independent custody for VCC assets. For tokenised securities that typically means a MAS-licensed digital-asset custodian or a bank with a tokenised-securities mandate. Self-custody by the manager is not the expected default.

Is tokenisation actually moving allocations?

Selectively. The biggest production use cases are in money-market funds and short-duration fixed income, where 24/7 settlement and on-chain collateralisation have an operational case. Private-market tokenisation is being piloted but real flow is still small relative to the broader VCC base.

Primary sources