Leading Swiss bank UBS has launched a live pilot of a tokenized version of its Variable Capital Company (VCC) fund as part of the Project Guardian initiative led by the Bank of Singapore.
UBS Asset Management in a press release declare The fund is part of the broader VCC umbrella and aims to bring different types of real-world assets (RWA) to blockchain. Thomas Kaegi, head of asset management for Singapore and Southeast Asia at UBS, said the plan is a milestone in understanding the tokenization of funds. Kaiji said:
“Through this exploratory initiative, we will work with traditional financial institutions and fintech providers to help understand how to improve market liquidity and market access for customers.”
UBS Asset Management has launched a controlled pilot of tokenized money market funds through the company’s in-house tokenization service UBS Tokenize. The company utilizes smart contracts on Ethereum for various activities, including redemptions and fund subscriptions.
The pilot is also part of the company’s global decentralized ledger technology strategy, which focuses on using private and public blockchains to enhance fund distribution and issuance.
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The new development fulfills previous predictions for the tokenization of RWA. During a panel discussion at the World Token Summit 2023, United Arab Emirates government advisor Ellis Wang told Cointelegraph that the tokenization of RWA offers various advantages such as transparency and security, which are features embedded in the blockchain. The executive said that tokenization of RWA is likely to be popular as it brings significant opportunities to many industries.
RWA-focused protocols became a hot topic earlier this year as they outperformed other subfields of decentralized finance. On June 9, the token income of RWA tokenization platform Centrifuge has soared 32% year-to-date.
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