Tokenizing Real-World Assets on Ethereum: Financial Giant UBS Initiates Pilot Testing

UBS, a Swiss-based financial giant, is blazing trails in the realm of blockchain and tokenized assets.

With the launch of pilot testing through Ethereum's blockchain, they aim to revolutionize the way we think about asset management and investment strategies. Read on to learn more about this groundbreaking initiative.

Kicking Off Experimental Operations of Tokenized Funds

Swiss-based leading financial services company UBS announced on October 2, 2023, the commencement of pilot testing related to funds tokenized through Ethereum's blockchain.

The pilot testing is being conducted by UBS Asset Management, a major asset management firm. They are reportedly using a Variable Capital Company (VCC) to launch the first test run of these tokenized funds.

This fund is part of a public-private partnership initiative led by the Monetary Authority of Singapore (MAS) called "Project Guardian." The effort aims to tokenize real-world assets (RWA) and integrate them into the blockchain.

Specifically, the fund uses UBS Tokenize, UBS Asset Management's tokenization service, and leverages Ethereum's smart contracts. This allows for various activities like fund subscription and redemption to be carried out seamlessly.

The experiment is also part of UBS Asset Management's broader Distributed Ledger Technology (DLT) strategy, emphasizing the use of both public and private blockchain networks to enhance the issuance and distribution of funds.

It is also considered as an expansion of tokenization services through UBS Tokenize.

Executive Insights

Thomas Kaegi, the head of UBS Asset Management for Singapore and Southeast Asia, has provided the following comment on this initiative:

This marks an important milestone in understanding the tokenization of funds based on UBS's expertise in the tokenization of bonds and structured debts.

Through this exploratory effort, we aim to collaborate with traditional financial institutions and fintech providers to improve market liquidity and access for our customers.

Future Endeavors under Project Guardian

UBS Asset Management also revealed that preparations are underway for further pilot testing under Project Guardian, in collaboration with a broader range of partners to explore various investment strategies.