UBS Asset Management Launches Tokenized Money Market Fund on Ethereum Blockchain
UBS Asset Management, one of the world’s largest fund houses, has introduced its first “live pilot” of a tokenized money market fund on the Ethereum blockchain. This initiative allows UBS Asset Management to test different fund activities on-chain, such as subscriptions and redemptions. The firm has utilized its in-house tokenization service, UBS Tokenize, to launch this pilot.
The head of UBS Asset Management in Singapore and Southeast Asia, Thomas Kaegi, stated that this milestone helps UBS understand how to improve market liquidity and access for clients by exploring the tokenization of funds. UBS has been actively involved in testing and utilizing blockchain technology, including launching the world’s first digital bond traded and settled on both blockchain-based and traditional exchanges.
Participation in Project Guardian
The tokenized money market fund pilot is part of Project Guardian, an industry initiative led by the Monetary Authority of Singapore (MAS). The fund is structured as a variable capital company (VCC), which is a new legal entity form for investment funds in Singapore.
Following the successful launch of the initial pilot transactions, UBS Asset Management plans to execute further live-pilot use cases under Project Guardian. They aim to collaborate with a wider range of partners and explore different investment strategies.
The Rise of Tokenization
Tokenization has been gaining popularity as it enables off-chain or real-world assets to be brought onto the blockchain. This process allows for tracking, trading, programmability, and management of these assets. According to The Block Research, tokenization has the potential to significantly reshape the digital asset landscape and the global financial system at large.
Hot Take: UBS Explores the Potential of Tokenization in Fund Management
UBS Asset Management’s launch of a tokenized money market fund on the Ethereum blockchain showcases the firm’s commitment to exploring the potential of tokenization in fund management. By leveraging blockchain technology, UBS aims to enhance market liquidity and access for clients. This move aligns with the broader trend of tokenization, which offers benefits such as improved asset tracking and programmability. As UBS continues to pioneer innovative solutions in the financial industry, its participation in Project Guardian demonstrates its dedication to collaborative industry initiatives. The successful implementation of this pilot will likely pave the way for further adoption of blockchain-based solutions in the fund management sector.
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