UBS Utilizes Ethereum for Testing Tokenized Money Market Fund in Pilot Program

Crypto News- In this pilot program, UBS Asset Management aims to assess various fund-related operations on the blockchain, including subscriptions and redemptions. The firm employs its proprietary tokenization service, UBS Tokenize, to facilitate the pilot.

UBS Utilizes Ethereum for Testing Tokenized Money Market Fund in Pilot Program

Thomas Kaegi, the head of UBS Asset Management in Singapore and Southeast Asia, emphasized the significance of this move, describing it as a pivotal step in exploring fund tokenization. He underscored UBS’s proficiency in tokenizing bonds and structured products and expressed a commitment to collaborating with traditional financial institutions and fintech providers to enhance market liquidity and client accessibility.

UBS has been actively involved in testing and adopting blockchain technology. Notably, in November 2022, the firm introduced the world’s first publicly traded digital bond, settling transactions on both blockchain-based and traditional exchanges. Subsequently, it issued a $50 million tokenized fixed-rate note in December 2022 and, in June 2023, facilitated the origination of 200 million yuan in fully digital structured notes for a third-party issuer.

This tokenized money market fund pilot is part of the Project Guardian initiative, aligning with collaborative efforts spearheaded by the Monetary Authority of Singapore (MAS). The fund is structured as a variable capital company (VCC), a novel legal entity format for various types of investment funds in Singapore.

After successfully launching the initial pilot transactions, UBS Asset Management intends to explore further live pilot use cases within Project Guardian, working alongside a broader array of partners and exploring diverse investment strategies.

Tokenization, the process that allows off-chain or real-world assets to be represented on-chain, has been gaining traction. It facilitates tracking, trading, programmability, and management of these assets, with the potential to reshape the digital asset landscape and the broader global financial system.