Leading fund house UBS Asset Management rolled out a live pilot of its tokenized money market fund on Ethereum. With the move, UBS Asset Management would be able to test multiple fund activities like redemptions and subscriptions on the blockchain network. For launching the pilot, UBS has leveraged its in-house tokenization service UBS Tokenize.
In a statement, UBS Asset Management Head for Singapore and Southeast Asia Thomas Kaegi said the initiative was a key milestone for the fund house in understanding tokenization of assets and would enable it to build on its expertise in tokenized bonds.
Kaegi also stated that the move would help the fund house work with traditional financial institutions and fintech companies to understand how market liquidity and market access could be improved for its clients. Analysts feel that the pilot project could help the prospects of the Top 10 cryptocurrencies in Southeast Asia.
This is not UBS’ first foray into tokenization or leveraging blockchain technology. Earlier in November 2022, UBS had rolled out the world’s first digital bond which was traded publicly on both regular and decentralized exchanges. The next month, UBS Asset Management issued a $50 million tokenized note at a fixed rate.
The fund house followed it up by issuing digital structured notes worth 200 million yuan for a third-party issuer in June 2023. The fund house’s pilot project is part of its Project Guardian — a joint initiative led by the Monetary Authority of Singapore. The project has been developed as a variable capital company.
After the successful launch of its pilot project. UBS Asset Management is now eyeing other use cases under Project Guardian and looking to work with a wide array of partners and explore new investment strategies.Tokenization is a process where off-chain or real-world assets are shifted to on-chain ecosystems.
The process enables one to track, trade, program, and manage digital assets. Analysts have been closely monitoring live cryptocurrency prices to gauge the impact of the initiative on the prospects of popular altcoins like Ethereum.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
