Australia’s second-largest bank, ANZ, has partnered with Chainlink Labs and ADDX to explore tokenized real-world assets, according to a Sept. 30 statement shared with CryptoSlate.

The move is part of ANZ’s involvement in the Monetary Authority of Singapore’s (MAS) Project Guardian, which aims to enhance access to tokenized assets in the financial sector.

Project Guardian is a long-term global effort involving financial regulators such as the UK’s FCA, Switzerland’s FINMA, and Japan’s FSA, as well as critical financial services players. The initiative is designed to pioneer asset tokenization in various economic sectors, including fixed-income, foreign exchange, and asset management products.

ANZ’s role

ANZ aims to leverage the partnership to examine how private blockchains can facilitate the exchange of tokenized assets like commercial papers. ANZ’s Singapore country head, Mark Evans, praised MAS for its leadership in financial innovation, stating:

“We’re pleased to join Project Guardian and play a role in fast-tracking the development of a stable, secure digital asset ecosystem which will be essential to meeting the future needs of our customers across the region.”

Nigel Dobson, ANZ’s Banking Services Lead, acknowledged the challenges in the tokenized asset market, noting that blockchain fragmentation hinders widespread adoption and integration.

Dobson said he was confident that ANZ’s partnerships will help overcome many of the sector’s common obstacles. He also emphasized that the initiative will demonstrate the capabilities of ANZ’s A$DC token, which has been designed to streamline the movement of goods and capital for customers across the region.

Similarly, Chainlink co-founder Sergey Nazarov said interoperability is essential for financial institutions to scale transactions with tokenized assets. He emphasized that Chainlink’s cross-chain interoperability protocol (CCIP) technology will play a key role in driving the growth of the tokenized economy.

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Federal Reserve Board Member Michelle W. Bowman criticized the central bank’s decision to cut the federal funds rate by 50 basis points earlier this September, expressing concerns during a speech on Monday at the Georgia Bankers Association President/CEO Conference in Charleston, South Carolina.

Bowman warned that the sharp rate cut might signal the Fed’s unease over the economy, potentially sparking fears of an impending recession.

The aggressive rate reduction, which many interpreted as bullish for assets like Bitcoin, raised alarms for Bowman.

She argued that the move could be seen as the Fed reacting prematurely to protect the economy, rather than signaling strength.

Bowman Criticizes Aggressive Rate Cut

“I was concerned that reducing the target range for the federal funds rate by 1/2 percentage point could be interpreted as a signal that the Committee sees some fragility or greater downside risks to the economy,” Bowman said at the conference..

She noted that the economy still shows “no clear signs of material weakening or fragility,” and that a more moderate 25 basis point cut would have better reflected confidence in the central bank’s progress toward its dual mandate.

In her speech, Bowman highlighted ongoing inflationary concerns.

She pointed out that core inflation, which excludes the volatile food and energy sectors, remains “uncomfortably” above the Fed’s 2% target, sitting at 2.7% as of August.

This elevated level of inflation, she suggested, should have prompted a more measured approach to policy adjustments.

Bowman also cautioned that by reducing rates so sharply in its first move, the Fed might unintentionally set the expectation of further cuts of similar magnitude.

This, she warned, could lead to a decline in longer-term interest rates at an unjustified pace, potentially loosening broader financial conditions too much.

If that were to occur, returning to the Fed’s 2% inflation target could become even more challenging.

Michelle Bowman’s View on Inflation Concerns

In addressing inflation, Michelle Bowman emphasized that there is substantial “pent-up demand” and sidelined cash ready to be deployed if the market believes more rate cuts are forthcoming.

This, she explained, could drive financial conditions to become too accommodative, further complicating the Fed’s task of managing inflation.

Bowman also predicted that the Federal Reserve’s long-term interest rate strategy wouldn’t necessarily involve returning to pre-pandemic levels.

“With a higher estimate of neutral, for any given pace of rate reductions, we would arrive at our destination sooner,” she said, implying that future policy might settle at higher interest rates than before.

Since the rate cut earlier in September, the stock market and Bitcoin have performed relatively well, despite September historically being a poor month for both asset classes.

According to CME Fedwatch, the market currently expects the Federal Reserve to drop interest rates by 25 basis points in November, though the possibility of another 50-point cut remains on the table.

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