SWIFT, Chainlink, and UBS Complete Tokenized Fund Pilot

• Chainlink, UBS Asset Management, and SWIFT have completed a collaborative pilot project.
• The project uses the Swift network to settle tokenized fund subscriptions and redemptions.
• The development is part of the MAS’ strategy to drive tokenization innovation in financial services.

Chainlink, UBS Asset Management, and SWIFT have completed a collaborative pilot project. It utilizes the Swift network to settle tokenized fund subscriptions and redemptions. This development aligns with the Monetary Authority of Singapore’s (MAS) broader strategy to drive tokenization innovation in financial services.

Notably, the project leverages the Swift network to enable seamless transactions between digital assets and traditional fiat payment systems. The pilot connects over 11,500 financial institutions across 200 countries and territories. In addition, the project stands unique from other tokenization pilots. It enables transactions without blockchain-only payment options and promotes digital finance through existing infrastructure.

In a November 4 development, the MAS announced its plans to introduce a four-part strategy that boosts the tokenized assets market. Leong Sing Chiong, Deputy Managing Director of Markets and Development at MAS, acknowledged the growing demand for asset tokenization. He stated,

We are encouraged by the keen participation from financial institutions and fellow policymakers to co-create industry standards and risk management frameworks to facilitate commercial deployment of tokenized capital markets products, and scale tokenized markets on an industry-wide basis.

Usually, traditional fund operations struggle with inefficiencies in subscription and redemption processes. The issues include manual intervention, settlement delays, and limited real-time transparency. Addressing these problems, the pilot showcased blockchain technology’s potential to revolutionize tokenization. 

It is noteworthy that the project is the result of the joint efforts of leading players, including Chainlink, UBS Asset Management, SBI Digital Markets, Swift, and Project Guardian. It facilitates a smooth interaction between all the involved parties. In addition, it allows UBS’s tokenized investment funds to issue or redeem fund tokens for investors.