UBS Asset Management Launches Tokenized Money Market Fund on Ethereum Blockchain
UBS Asset Management, a global fund management company, has initiated a “live pilot” of a tokenized money market fund on the Ethereum blockchain. The company is using its proprietary service, UBS Tokenize, to explore on-chain processes such as subscriptions and redemptions.
Exploring On-Chain Processes for Fund Activities
Through this pilot program, UBS Asset Management aims to conduct various fund-related activities on the blockchain, including subscriptions and redemptions. Thomas Kaegi, the head of UBS Asset Management in Singapore and Southeast Asia, sees this initiative as a crucial step in unlocking the potential of tokenizing a wide range of financial assets beyond just bonds.
Part of Project Guardian Initiative
This development is part of UBS’s broader Project Guardian, overseen by the Monetary Authority of Singapore. The money market fund is structured as a variable capital company (VCC), which represents a novel legal framework in Singapore’s investment landscape.
Expansion Plans and Previous Blockchain Involvement
After successful initial transactions, UBS Asset Management plans to expand the pilot’s scope by collaborating with a more diverse group of financial entities and exploring various investment strategies. UBS has previously made headlines for introducing the world’s first digital bond tradable on both traditional and blockchain platforms. The firm has also issued tokenized fixed-rate notes and created entirely digital structured notes.
Driving Innovation in Finance
This Ethereum-based pilot project marks a significant milestone in UBS’s exploration of blockchain-based financial instruments. It not only provides valuable experience for UBS but also contributes to the industry’s understanding of how blockchain can enhance market liquidity and client accessibility.
The Future of Blockchain in Finance
UBS Chair Colm Kelleher has emphasized the potential of blockchain technology to reduce operational hurdles and costs in the financial ecosystem. This pilot project serves as a blueprint for traditional financial entities to integrate their practices with the transformative power of blockchain technology.
Hot Take: UBS Takes a Major Step Towards Tokenization of Financial Assets
UBS Asset Management’s launch of a tokenized money market fund on the Ethereum blockchain demonstrates the company’s commitment to exploring the potential of blockchain technology. By leveraging its proprietary service, UBS is paving the way for the tokenization of various financial assets. This pilot program not only benefits UBS but also contributes to the industry’s understanding of how blockchain can enhance market liquidity and accessibility. With UBS’s track record of involvement in blockchain initiatives, this latest development marks another significant milestone in their venture into blockchain-based financial instruments.
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