According to "The Block" report, UBS Asset Management, one of the world's largest fund companies, has launched the first live pilot of a tokenized money market fund on the Ethereum blockchain.

UBS Asset Management said on Monday (2nd) that it used its internal tokenization service UBS Tokenize to launch the pilot of the fund, which is presented in the form of a smart contract on the Ethereum chain, allowing UBS to test various methods on the chain. Fund activities, including subscription and redemption.

Thomas Kaegi, head of Singapore and Southeast Asia at UBS Asset Management, said in a statement:

"Building on UBS's expertise in the tokenization of bonds and structured financial products, this is an important milestone in understanding the tokenization of funds. 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 clients.”

UBS has been at the forefront of testing and leveraging blockchain technology, and in November 2022, UBS launched the world’s first digital bond, which will be publicly traded and settled on blockchain-based exchanges and traditional exchanges. In December 2022, UBS issued $50 million in tokenized fixed-rate notes; in June 2023, the company partnered with Bank of China International (BOCI) to successfully issue fully digital structured notes worth RMB 200 million.

UBS said that the latest tokenized money market fund pilot is part of the collaborative industry initiative "Project Guardian" led by the Monetary Authority of Singapore (MAS). The fund is structured as a Variable Capital Company (VCC) ) – a new legal entity structure applicable to all types of investment funds in Singapore.

UBS Asset Management said that following the successful launch of the first pilot transactions, the firm will look to execute more live pilot use cases under Project Guardian, working with a wider range of partners to explore various investment strategies.

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