UBS Launches Tokenized Money Market Fund on Ethereum

Leading Swiss bank UBS partners with Singapore's central bank on blockchain initiative

UBS has announced the launch of a live pilot of a tokenized version of its variable capital company fund, as part of an initiative led by the Monetary Authority of Singapore. The project, called Project Guardian, aims to bring different types of real-world assets to the blockchain.

Improved liquidity and market access

The pilot is a significant milestone in the understanding of fund tokenization, according to Thomas Kaegi, the head of UBS Asset Management for Singapore and Southeast Asia. Kaegi stated that the initiative will help improve market liquidity and market access for clients by collaborating with traditional financial institutions and fintech providers.

Tokenized money market fund

UBS Asset Management launched the controlled pilot of the tokenized money market fund using their in-house tokenization service called UBS Tokenize. The fund operates on Ethereum, allowing for various activities such as redemptions and fund subscriptions to be carried out through smart contracts.

Global distributed ledger technology strategy

The pilot is part of UBS Asset Management's wider strategy on distributed ledger technology, which aims to use private and public blockchains to enhance fund distribution and issuance.

Predicted advantages of tokenization

The tokenization of real-world assets provides advantages such as transparency and security, according to Ellis Wang, a United Arab Emirates government adviser. Tokenization of real-world assets may gain popularity as it presents significant opportunities for various industries.

Rise of real-world asset protocols

Protocols focusing on real-world asset tokenization have gained attention this year, outperforming other subsectors of decentralized finance. Token gains on Centrifuge, a tokenization platform for real-world assets, surged by 32% year-to-date on June 9.