Project Pigeon has launched an Asia-Pacific working group for permissionless blockchain governance, bringing together Elliptic, the Digital Asset Association, the Responsible Fintech Institute and Baker McKenzie Wong & Leow. The practical question is whether banks can use public blockchains under a risk framework that regulators can inspect.
| What you need to know |
|---|
| 1Project Pigeon announced its Asia-Pacific working group on 13 August 2026. |
| 2Elliptic, the Digital Asset Association, the Responsible Fintech Institute and Baker McKenzie jointly convene the group. |
| 3Its work covers governance, technology, settlement-finality and anti-money-laundering risks on permissionless blockchains. |
| 4The consortium plans an industry guide and a briefing paper for supervisors in the first quarter of 2027. |
The timing matters because the Monetary Authority of Singapore published an April 2026 consultation on prudential treatment for cryptoassets issued on permissionless blockchains. The consultation gives the market a narrow but important opening: permissionless cryptoassets may be treated as Group 1 assets if banks can show that the relevant risks are properly mitigated.
Why public-chain risk is becoming a bank problem
For years, the institutional compromise was simple: banks could experiment with digital assets, but usually inside permissioned systems or narrowly controlled pilots. Permissionless blockchains create a harder problem. They are open networks, which means the bank does not control validators, protocol upgrades, network governance, wallet activity or the full path between a transaction and final settlement.
That does not make public chains unusable for regulated finance. It does mean the risk work has to move from slogans to controls. The Project Pigeon framework is useful because it separates the question into four workstreams: who governs the network, how resilient the technology is, when settlement can be treated as legally final, and how AML/CFT controls work when addresses are pseudonymous.
MAS has put similar pressure on the market. Its April 2026 consultation sought feedback on a more risk-sensitive approach for permissionless cryptoassets. Allen & Gledhill summarized the proposal as allowing banks to classify and treat a permissionless cryptoasset as a Group 1 cryptoasset if the asset meets principle-based requirements designed to mitigate permissionless-chain risks.
The Group 1 question is the real story
Group 1 treatment is important because it can move some cryptoasset exposure out of the most punitive prudential bucket, but only if the asset and operating setup satisfy the relevant standards. In practice, that turns permissionless-chain governance into a balance-sheet issue for banks, not just a technology-policy debate.
WongPartnership described MAS’ April 2026 paper as a shift toward more risk-sensitive treatment after feedback on the 2025 proposal. The public-versus-private label is therefore not enough. Banks need to show that the risks of an open network are understood, controlled and monitored.
Elliptic’s role is tied to that test. The company says its data and intelligence support compliance for banks, crypto businesses and government agencies. In this working group, the AML/CFT pillar will help determine whether banks can monitor public-chain exposure to the standard regulators expect.
What still needs proof
For now, this is a working group rather than a tested standard. The announcement does not name participating banks or exchanges, publish a draft control framework, or show how supervisors will evaluate the final guidance. The Q1 2027 guide will matter only if it becomes practical enough for compliance, risk, treasury and legal teams to use.
The hard part will be controls testing. A bank can document node concentration, monitor sanctions risk, review bridge exposure and map settlement assumptions, but it still needs evidence that the process works during protocol incidents, market stress and contested transactions. That evidence will decide whether permissionless-chain use becomes a regulated banking workflow or remains mostly outside bank balance sheets.
FAQ
What did Project Pigeon announce?
Project Pigeon announced an APAC working group focused on governance and risk-management standards for financial institutions using permissionless blockchains.
Who convened the working group?
The working group is jointly convened by Elliptic, the Digital Asset Association, the Responsible Fintech Institute and Baker McKenzie, with Baker McKenzie serving as secretariat.
Why does MAS matter to this story?
MAS published an April 2026 consultation on prudential treatment for cryptoassets issued on permissionless blockchains. The consultation is the regulatory context for the working group’s focus on Group 1 cryptoasset treatment.
What risks does the framework cover?
The release identifies four pillars: governance risk, technology risk, settlement finality risk and AML/CFT risk. Each pillar is led by one of the consortium co-convenors.
When is the guide expected?
The consortium says it plans to publish an industry guide and regulatory briefing paper in Q1 2027.
Is this a guarantee that banks can use public blockchains freely?
No. The announcement is about developing a risk-management framework. Banks would still need to satisfy regulatory, prudential, legal, compliance and operational controls before using permissionless-chain exposure in regulated activity.
Source note: This article is based on the 13 August 2026 PRNewswire UK release, the MAS consultation page, the Allen & Gledhill summary of the MAS consultation, the WongPartnership summary of the MAS consultation, the Responsible Fintech Institute website and Elliptic’s company background. Project details, participant roles and the Q1 2027 publication target are attributed to the PRNewswire release unless otherwise stated.
