UBS, the leading Swiss bank, has introduced a live pilot program for a tokenized version of its variable capital company (VCC) fund as part of Project Guardian, an initiative led by the Monetary Authority of Singapore.
In an official statement, UBS Asset Management revealed that this fund is just one aspect of a comprehensive VCC framework designed to bring various real-world assets (RWA) into the blockchain ecosystem. Thomas Kaegi, the head of UBS Asset Management for Singapore and Southeast Asia, described this project as a significant step towards understanding the complexities of fund tokenization.
Kaegi stated:
“Through this exploratory initiative, we will collaborate with traditional financial institutions and fintech innovators to gain insights into improving market liquidity and client accessibility.”
UBS Asset Management initiated a controlled pilot for the tokenized money market fund using their in-house tokenization platform called UBS Tokenize. By employing a smart contract on the Ethereum blockchain, the firm executed a range of operations, including redemptions and fund subscriptions.
This pilot program is also an integral part of the company’s global strategy focused on distributed ledger technology (DLT), utilizing both private and public blockchains to enhance fund distribution and issuance.
This groundbreaking development validates earlier predictions about the tokenization of RWAs. During a panel discussion at the 2023 World Token Summit, Ellis Wang, an advisor to the United Arab Emirates government, highlighted the advantages of tokenizing RWAs, such as transparency and security, which are inherent features of blockchain technology. Wang stated that the tokenization of RWAs is gaining momentum, presenting significant opportunities across various industries.
In recent months
Protocols focusing on RWAs have gained substantial traction, surpassing other subsectors of decentralized finance. On June 9th, token gains on the RWA tokenization platform Centrifuge had risen by an impressive 32% year-to-date.
