UBS Asset Management has unveiled the initiation of a groundbreaking pilot program for the first blockchain-native tokenized VCC fund in Singapore.
UBS Asset Management has assumed a pioneering role by introducing Singapore’s inaugural blockchain-native tokenized money market fund. The first live pilot of this innovative endeavor was officially launched on the Ethereum blockchain on October 2nd, as announced. This fund is organized as a Variable Capital Company (VCC), a novel legal structure applicable to various investment funds in Singapore. It is a crucial component of Project Guardian, a collaborative industry initiative spearheaded by the Monetary Authority of Singapore (MAS). The primary objective of Project Guardian is to assess the viability of asset tokenization and DeFi applications while simultaneously safeguarding financial stability and integrity.
Pilot programs by UBS
In this controlled pilot of the tokenized money market fund, UBS utilizes its in-house tokenization service called ‘UBS Tokenize.’ This fund is represented as a smart contract on the Ethereum public blockchain, providing UBS Asset Management with the capability to execute various functions, such as facilitating fund subscriptions and redemptions.
UBS Asset Management has launched the first tokenized money market fund pilot in Singapore on the Ethereum blockchain. This initiative is part of a broader project to bring real-world assets onto the blockchain, and it leverages UBS’s in-house tokenization service, ‘UBS Tokenize,’ for activities such as fund subscriptions and redemptions. Thomas Kaegi, Head of UBS Asset Management in Singapore and Southeast Asia, highlighted the importance of this move and its contribution to enhancing market liquidity and access for clients. This development aligns with UBS Asset Management’s global strategy to use blockchain technology for fund issuance and distribution, following their successful launch of the world’s first publicly traded digital bond in November 2022.
A month later in the same year
It proceeded to release a USD 50 million tokenized fixed-rate note, and in June 2023, it initiated CNH 200 million worth of fully digital structured notes for a third-party issuer in Hong Kong. This marked the inaugural issuance of a tokenized security by a Chinese financial institution within the country. Furthermore, it represented the first of its kind in the Asia Pacific region, structured under both Hong Kong and Swiss legal frameworks, and tokenized on the Ethereum blockchain.
Following the successful introduction of their recent pilot transactions, UBS Asset Management has also declared its intention to expand its exploration of live pilot use cases within Project Guardian. The firm aims to collaborate with a broader range of partners and investigate diverse investment strategies.
Tokenization plays a pivotal role in bringing real-world assets onto blockchain platforms, enabling the monitoring, trading, programmability, and administration of these assets. As one of the world’s largest global wealth managers and Switzerland’s foremost universal bank, UBS’s venture into this realm underscores its dedication to blockchain technology.
Moreover, the company delivers extensive asset management solutions and concentrates on specialized investment banking services.
