UBS Asset Management, a leading global fund house, has taken a significant step towards integrating blockchain technology by launching a live pilot of a tokenized money market fund on the Ethereum blockchain. This pilot, part of "Project Guardian," facilitates testing various fund activities on-chain, including subscriptions and redemptions. UBS has utilized its in-house tokenization service, UBS Tokenize, to kickstart this innovative fund pilot.
Thomas Kaegi, head of UBS Asset Management in Singapore and Southeast Asia, noted this as a milestone in comprehending the tokenization of funds. He emphasized building upon UBS's expertise in tokenizing bonds and structured products. The pilot aims to collaborate with traditional financial institutions and fintech providers to enhance market liquidity and accessibility for clients.
UBS has been a front runner in exploring and utilizing blockchain technology. Their previous ventures include launching the world's first digital bond publicly traded and settled on both blockchain-based and traditional exchanges in November 2022. Additionally, they issued a $50 million tokenized fixed-rate note and originated 200 million yuan of fully digital structured notes for a third-party issuer.
The initiative aligns with "Project Guardian," a collaborative effort led by the Monetary Authority of Singapore (MAS). This is designed to bring different types of investment funds under a common legal entity structure. Following the successful pilot transactions, UBS Asset Management intends to extend live-pilot use cases under Project Guardian, collaborating with a broader set of partners and exploring diverse investment strategies.
At Lab51, we believe institutional adoption is key to open the crypto market to traditional investors. This announcement by UBS is a testimony of how blockchain is making is way into traditional banking, which could potentially lead to a new perception of the crypto market as a whole.