Leading Swiss bank UBS has launched a live pilot of a tokenized version of its variable capital company (VCC) fund as part of Project Guardian, an initiative led by the Singapore central bank.

UBS Asset Management announced in a press release that the fund is part of a broader VCC umbrella that aims to bring different types of real-world assets (RWA) to the blockchain. Thomas Kaegi, head of Singapore and Southeast Asia at UBS Asset Management, said the project is a milestone in understanding the tokenization of funds. Kaegi 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 our clients.

UBS Asset Management has launched a controlled pilot of a tokenized money market fund through the firm’s in-house tokenization service, UBS Tokenize. The firm used smart contracts on Ethereum to conduct various activities, including redemptions and fund subscriptions.

The pilot is also part of the company’s global distributed ledger technology (DLT) strategy, which focuses on using private and public blockchains to enhance funds distribution and issuance.

Related: Singapore pledges $112 million to support Web3 and other fintech solutions

The new development fulfills previous predictions about the tokenization of RWAs. During a panel discussion at the World Token Summit 2023, Ellis Wang, an advisor to the UAE government, told Cointelegraph that the tokenization of real-world assets “has various advantages” such as transparency and security, which are features embedded in blockchain. According to the executive, the tokenization of RWAs is likely to become popular as it offers significant opportunities for many industries.

Earlier this year, RWA-focused protocols became a hot topic as they outperformed other sub-sectors of decentralized finance (DeFi). On June 9, the token earnings of the RWA tokenization platform project surged 32% year-to-date (YTD).

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Author: Deepchain DCNews

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