UBS Asset Management, a global leader in fund management, has embarked on a groundbreaking journey by launching its first “live pilot” for a tokenized money market fund on the Ethereum blockchain.
In-House Expertise with UBS Tokenize
In a significant move, UBS Asset Management is harnessing the power of its in-house tokenization service to explore various on-chain fund activities, including subscriptions and redemptions. This launch marks a pivotal moment in the financial landscape, representing a concerted effort by UBS to deepen its understanding of the complexities associated with fund tokenization.
Visionary Leadership: Thomas Kaegi’s Perspective
Thomas Kaegi, the head of UBS Asset Management in Singapore and Southeast Asia, expressed the importance of this initiative, stating, “Through this exploratory initiative, we will collaborate with traditional financial institutions and fintech providers to enhance market liquidity and improve market access for our clients.”
UBS has been a trailblazer in embracing and integrating blockchain technology into its operations. In November 2022, the firm introduced the world’s first publicly traded digital bond, settling on blockchain-based and traditional exchanges. Demonstrating a commitment to innovation, the investment company has issued a $50 million tokenized fixed-rate note in December 2022 and, in June 2023, originated 200 million yuan of fully digital structured notes for a third-party issuer.
Integral Role in Project Guardian
This tokenized money market fund pilot is integral to Project Guardian, a collaborative initiative spearheaded by the Monetary Authority of Singapore (MAS). Structured as a variable capital company (VCC), a novel legal entity form for various investment funds in Singapore, the fund represents a strategic move in collaboration with industry stakeholders.
Following the successful inauguration of the initial pilot transactions, UBS Asset Management is poised to undertake additional live-pilot use cases under Project Guardian. The firm plans to broaden its collaboration with diverse partners, exploring various investment strategies.
The Future Unfolds: UBS’s Pioneering Endeavor
The surge in popularity of tokenization, a process that brings real-world assets onto the blockchain, is undeniably apparent. Tokenization facilitates tracking and trading and enables programmability and efficient asset management. A recent report emphasizes its potential to reshape the digital asset landscape and the global financial system.
The financial industry watches keenly as UBS forges ahead in this pioneering endeavor. The exploration of tokenized funds signifies a dynamic shift towards embracing emerging technologies, with the potential to redefine how financial assets are managed, traded, and accessed on a global scale.
