UBS, the Swiss Bank, Introduces Ethereum-Based Tokenized Money Market Fund

UBS Launches Tokenized VCC Fund Pilot as Part of Project Guardian

UBS, a leading Swiss bank, has initiated a live pilot of a tokenized version of its variable capital company (VCC) fund. The launch is part of Project Guardian, an initiative led by Singapore’s central bank. UBS Asset Management announced that the tokenized fund is part of a broader VCC umbrella aimed at bringing different types of real-world assets to the blockchain.

Thomas Kaegi, the head of UBS Asset Management for Singapore and Southeast Asia, described the project as a significant step in understanding funds tokenization. The objective is to collaborate with traditional financial institutions and fintech providers to enhance market liquidity and access for clients.

Tokenized Money Market Fund Pilot

The controlled pilot of the tokenized money market fund was launched by UBS Asset Management using their in-house tokenization service called UBS Tokenize. Utilizing a smart contract on Ethereum, the firm conducted various activities such as redemptions and fund subscriptions.

This pilot aligns with UBS Asset Management’s global distributed ledger technology strategy, which focuses on leveraging private and public blockchains to improve fund distribution and issuance.

RWA Tokenization Platform Gains Momentum

RWAs (real-world assets) have gained attention this year within decentralized finance protocols. On June 9, RWA tokenization platform Centrifuge experienced a 32% increase in token gains year-to-date, outperforming other subsectors in decentralized finance.

Hot Take: UBS Explores Tokenization Potential for Funds

UBS’s live pilot of a tokenized VCC fund marks an important milestone in exploring the potential of tokenizing funds. Through collaboration with traditional financial institutions and fintech providers, UBS aims to enhance market liquidity and access for clients. This pilot aligns with UBS Asset Management’s strategy of leveraging blockchain technology to improve fund distribution and issuance. The growing popularity of real-world asset tokenization platforms further highlights the potential of these protocols within decentralized finance.