UBS Conducts Live Pilot of Tokenized Fund
UBS, a leading Swiss bank, has begun a live pilot of a tokenized version of its Variable Capital Company (VCC) fund. This initiative, called Project Guardian and led by Singapore’s central bank, aims to bring real-world assets onto the blockchain. Thomas Kaegi, the head of UBS Asset Management for Singapore and Southeast Asia, believes that this pilot signifies an important milestone in understanding fund tokenization. Kaegi emphasizes the importance of collaborating with traditional financial institutions and fintech providers to improve market liquidity and access for clients.
“This is a key milestone in understanding the tokenization of funds, building on UBS’s expertise in tokenizing bonds and structured products. Through this exploratory initiative, we will work with traditional financial institutions and fintech providers to help understand how to improve market liquidity and market access for clients,” shares Kaegi in an official statement.
Controlled Pilot Conducted Through UBS Tokenize
UBS Asset Management conducted a controlled pilot of the tokenized money market fund using its in-house tokenization service, UBS Tokenize. The pilot utilized a smart contract on the Ethereum network to enable activities like redemptions and fund subscriptions. This development aligns with UBS Asset Management’s global strategy to leverage private and public blockchains for improved fund distribution and issuance.
Validation of Real-World Asset Tokenization
This move by UBS validates predictions about the tokenization of real-world assets. Ellis Wang, a government adviser from the United Arab Emirates, highlights advantages such as transparency and security that come with tokenizing such assets. It is expected that the tokenization of real-world assets will gain traction as it offers significant opportunities across various industries.
Real-World Asset Tokenization Protocols Gain Prominence
Protocols related to real-world asset tokenization have gained prominence, surpassing other decentralized finance subsectors. In June, token-related gains from the RWA tokenization platform Centrifuge had surged by 32% year-to-date, despite the firm facing a debt crisis.
Expansion of UBS’s Tokenization Services
This pilot launch follows UBS’s previous ventures into digital bonds and structured products tokenization. It is part of UBS’s broader expansion of tokenization services. After the successful pilot transactions, UBS Asset Management plans to conduct further live pilot use cases under Project Guardian, collaborating with a wider range of partners and exploring various investment strategies.
Hot Take: Tokenization of Real-World Assets Gains Momentum
The live pilot of a tokenized fund by UBS marks an important step towards understanding the tokenization of funds. This move brings real-world assets onto the blockchain, offering advantages such as improved transparency and security. The validation of real-world asset tokenization opens up significant opportunities across various industries. Protocols related to real-world asset tokenization have gained prominence in the decentralized finance space. With UBS’s expansion of tokenization services and plans for further live pilot use cases, it is evident that the momentum behind the tokenization of real-world assets is growing rapidly.
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