Leading Swiss bank UBS has launched a tokenized money market fund on the Ethereum network as a part of a wider Variable Capital Company (VCC) umbrella that brings various real-world assets to the blockchain
UBS Asset Management announced in a press release that the fund is part of a larger VCC umbrella that aims to introduce various types of real-world assets (RWA) to the blockchain.
According to Thomas Kaegi, the head of UBS Asset Management for Singapore and Southeast Asia, the initiative is a turning point in comprehending the tokenization of funds. Caegi stated:
“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 Asset Management introduced a controlled pilot of a tokenized money market fund using UBS Tokenize, the company’s tokenization service. The company conducted various operations using an Ethereum smart contract, including redemptions and fund subscriptions.
The pilot is also part of the company’s global distributed ledger technology (DLT) strategy, which enhances fund distribution and issuance through private and public blockchains.
The new development validates earlier forecasts regarding the tokenization of RWAs. During a panel discussion at the World Token Summit 2023, Ellis Wang, an adviser to the government of the United Arab Emirates, stated that tokenizing real-world assets offers numerous benefits, including blockchain-based transparency and security.
According to the executive, the tokenization of RWAs may gain traction as it presents innumerable industries with significant opportunities.
Protocols concentrating on RWAs became a popular topic earlier this year as they outperformed other subsectors of decentralized finance (DeFi). On June 9, the year-to-date (YTD) token gains of an RWA tokenization platform initiative increased by up to 32%.
