Swiss bank UBS has commenced a live pilot of a tokenized version of its variable capital company (VCC) fund within the framework of Project Guardian, an initiative spearheaded by Singapore’s central bank. UBS Asset Management revealed in a press release that this fund is part of a broader VCC umbrella aimed at bringing various real-world assets (RWA) onto the blockchain. Thomas Kaegi, the head of UBS Asset Management for Singapore and Southeast Asia, highlighted the significance of this project, stating that through this exploratory initiative, they will collaborate with conventional financial institutions and fintech providers to gain insights into how to enhance market liquidity and market access for clients.
UBS Asset Management initiated the controlled pilot of the tokenized money market fund using its in-house tokenization service, known as UBS Tokenize. Leveraging a smart contract on Ethereum, the company executed a range of activities, including redemptions and fund subscriptions. This pilot also aligns with the firm’s global distributed ledger technology strategy, which revolves around leveraging both private and public blockchains to improve fund distribution and issuance. This development aligns with earlier predictions regarding the tokenization of RWAs. During a panel discussion at the 2023 World Token Summit, Ellis Wang, an adviser to the United Arab Emirates government, shared insights regarding the same, emphasizing that tokenizing RWAs offers advantages such as transparency and security, inherent features of blockchain technology. Wang also noted the potential for widespread adoption of RWA tokenization, given the substantial opportunities it presents to various industries.
Earlier this year, protocols centered on RWAs gained prominence, outperforming other decentralized finance subsectors. On June 9, the token gains of the RWA tokenization platform Centrifuge had risen by 32% year-to-date.
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