Swift, UBS, and Chainlink test tokenized fund settlements to modernize finance
In a pivotal advancement for digital finance, Swift, UBS Asset Management, and Chainlink have collaborated on a pilot project under Singapore's Monetary Authority (MAS) Project Guardian, testing tokenized fund settlements within traditional financial structures.
This pilot leverages Swift's extensive messaging network, connecting over 11,500 institutions worldwide, to bridge tokenized assets and fiat payments without requiring blockchain-exclusive payment systems as stated in the news release. By enabling transactions through established networks, the initiative could lower barriers for adopting digital finance.
Chainlink co-founder Sergey Nazarov highlighted the blockchain integration at Swift’s Sibos conference, expressing optimism about how this setup could boost capital flow without needing widespread on-chain payment options.
Reducing Inefficiencies in Fund Transactions
The Swift-led pilot specifically targets inefficiencies in traditional fund operations like redemptions and subscriptions, often slowed by manual processes and settlement delays. With blockchain’s automation, these transactions saw quicker processing and greater transparency, marking a potential shift in how asset management handles liquidity and operational costs.
In alignment with this momentum, UBS recently launched a tokenized fund, the “UBS USD Money Market Investment Fund Token” or “uMINT,” on the Ethereum blockchain. This move caters to the rising investor demand for tokenized assets, while UBS and SBI Digital Markets also developed a Digital Subscription and Redemption system as part of MAS's Project Guardian.
Speaking at MAS's inaugural Layer One Summit, MAS deputy managing director Leong Sing Chiong acknowledged the achievements of financial heavyweights like UBS and SBI in advancing tokenization but underscored that achieving scalable adoption remains a challenge. “No one has yet succeeded in achieving scale,” Chiong noted, citing the need for robust infrastructure to enable broad, industry-wide integration of tokenized finance.
In October, Chainlink introduced private blockchain transaction capabilities tailored for institutional clients, enhancing privacy and security in their operations. This initiative marks a key move in Chainlink's strategy to engage enterprise-level customers and promote blockchain adoption within major financial institutions.
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