Singapore Monetary Authority Releases Interpretation of the White Paper "Global Layer 1 - The Fundamental Layer of Financial Networks"

The Global Layer One (GL1) initiative aims to explore the development of a multifunctional shared ledger infrastructure based on Distributed Ledger Technology (DLT) that is developed by regulated financial institutions for the financial industry. The vision of GL1 is to enable regulated financial institutions to deploy inherently interoperable digital asset applications across jurisdictions utilizing this shared ledger infrastructure, which is managed by universal asset standards, smart contracts, and digital identity technologies.

Creating a shared ledger infrastructure will unlock liquidity that is dispersed across multiple locations and enable financial institutions to collaborate more effectively. Financial institutions can expand the services they offer to customers while reducing the costs of building their own infrastructure.

The focus of GL1 is to provide a shared ledger infrastructure for financial institutions to develop, deploy, and use applications suitable for the financial industry's value chain, such as issuance, distribution, trading and settlement, custody, asset services, and payments. This can enhance cross-border payments as well as the cross-border distribution and settlement of capital market instruments.

By leveraging the capabilities of a broader financial ecosystem, financial institutions can provide richer and more extensive services to end-users and bring them to market faster. The shared ledger infrastructure of GL1 will enable financial institutions to build and deploy composite applications that utilize the capabilities of other application providers. This can manifest as programmatic modeling and execution of institutional-level financial protocols for foreign exchange trading and settlement. This, in turn, can improve the interaction of tokenized currencies and assets, achieving synchronized delivery of digital and other tokenized assets for delivery versus payment (DvP) settlement, as well as payment versus payment (PvP) settlement for foreign exchange trading.

GL1 is designed to support a variety of use cases and is agnostic to asset types. It will support all regulated financial assets, tokenized central bank currencies, and commercial bank currencies on a shared ledger infrastructure. Participating central banks may also issue central bank digital currencies (CBDC) as common settlement assets.

For GL1, any financial institution that meets the minimum applicable standards and passes the due diligence process can participate in and use GL1 services without the need for approval from a central authority. However, only licensed parties can build and deploy commercial applications on the GL1 platform, and they must comply with GL1's data and security standards.

By introducing digital asset applications and regulated financial institution participants into shared ledger infrastructure, the financial industry is expected to realize the advantages of digital assets and may significantly accelerate the modernization of traditional market infrastructure.

GL1 is expected to be a multi-year initiative aimed at establishing the foundational digital infrastructure capable of shaping the future financial network. When this vision is realized, it could fundamentally change the way asset lifecycles and capital markets operate. Achieving this potential requires unprecedented multilateral cooperation across jurisdictions, including participation from both the private and public sectors.

The initiative welcomes contributions from the international community to promote the development of GL1 as a foundational digital infrastructure, supporting the transformation of the financial industry.