Recently, UBS Asset Management launched a pilot program for tokenizing its Variable Capital Company (VCC) fund in Singapore, marking a significant milestone in bringing real-world assets onto the blockchain.
This fund, named UBS Tokenize, utilizes UBS’s in-house tokenization service and Ethereum smart contracts. As a result, clients can subscribe to and redeem their fund shares directly on the blockchain.
“This is a significant milestone in the tokenization of funds, building on UBS’s expertise in tokenizing bonds and structured products. With this initiative, we are looking to collaborate with traditional financial institutions and fintech providers to enhance market liquidity and market access for our clients.” – Thomas Kaegi, Head of Asset Management at UBS in Singapore and Southeast Asia.
UBS has been at the forefront of digital asset innovation. In November 2022, UBS introduced the world’s first publicly traded digital bond. Following that, in December 2022, they issued a $50 million fixed-rate tokenized bond. Additionally, over $28 million in structured note tokenized bonds were launched in 2023.
Following successful pilot transactions, UBS Asset Management plans to consider broader implementations within Project Guardian, partnering with more collaborators to explore various investment strategies.
Earlier this year, asset-backed protocols became a hot topic in the cryptocurrency space. Many major organizations, including Franklin Templeton, KKR, and Hamilton Lane, introduced tokenized funds. Notably, the Federal Reserve also recognized the significance of this sector by issuing a report on the transformation of real-world assets into digital assets.