UBS Launches Tokenization Trial on Ethereum Network
BITmarkets Team
Oct 12, 2023
As part of Project Guardian, an effort spearheaded by Singapore's central bank, leading Swiss bank UBS has launched a live pilot of a tokenized version of its variable capital company (VCC) fund.
UBS Asset Management revealed in a press release that the fund is part of a larger VCC umbrella meant to introduce various forms of real-world assets (RWA) on the blockchain.
The experiment, according to Thomas Kaegi, the head of UBS Asset Management for Singapore and Southeast Asia, represents a milestone in understanding fund tokenization. Kaegi stated:
“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.”
UBS Asset Management conducted a controlled pilot of the tokenized money market fund using UBS Tokenize, the company's in-house tokenization solution. The firm performed a variety of actions, including redemptions and fund subscriptions, by utilizing an Ethereum smart contract.
The pilot is also part of the company's global distributed ledger technology strategy, which focuses on enhancing fund distribution and issuance through the use of private and public blockchains.
The latest development confirms prior predictions about RWA tokenization. During a panel discussion at the World Token Summit 2023, United Arab Emirates government adviser Ellis Wang told Cointelegraph that tokenizing RWAs provides benefits such as transparency and security, all of which are built into blockchains.
According to the executive, the tokenization of RWAs may gain traction because it provides considerable opportunities for a variety of industries.
Protocols concentrating on RWAs became a hot topic earlier this year as they've outperformed other subsectors of decentralized finance.
On June 9, token gains of RWA tokenization platform Centrifuge had soared by 32% year-to-date.
Sources:
https://cointelegraph.com/news/ethereum-ubs-tokenize-money-market-fund-launch
