UBS Asset Management announced that it is turning to Ethereum to launch a pilot program for a new tokenized money market fund.
One of the most important financial fund firms in the world, UBS Asset Management, will base a new experiment on Ethereum. This is a tokenized money market fund that will be in testing on the largest multipurpose network in the crypto sector.
As reported by the institution this Monday, the live pilot test will allow the firm to experiment with various functions of the blockchain. Fund activities linked to the network include subscriptions and redemptions. It is worth mentioning that the firm used its internal service, UBS Tokenize, to launch this fund in a pilot version.
Despite headwinds in the cryptocurrency market, traditional firms continue to enter the sector. This is due to the extensive advantages and savings that blockchain technology offers for multiple service applications. In that sense, the flexibility of this technology allows it to adapt to the most varied forms of business.
UBS Bet on Innovation through Ethereum
This new advance by UBS on Ethereum becomes a testament to the confidence of high-caliber financial companies in the blockchain. A wide variety of companies are in the phase of exploring the advantages of new technologies in their business schemes.
Both artificial intelligence and the blockchain are two of the great pillars that will facilitate progress. The evolution of FinTechs is an example of how society is moving towards a new stage. In it, a domain of security and efficiency in processes is drawn. These are the considerations that lead UBS towards this new tokenized monetary fund experiment.
“This is a key milestone in understanding fund tokenization, leveraging UBS’s expertise in bond tokenization and structured products,” said Thomas Kaegi, head of the firm in Southeast Asia and Singapore. Likewise, he added that the firm works with traditional and technological institutions to improve market conditions.
“Through this exploratory initiative, we will work with traditional financial institutions and financial technology providers to help understand how to improve market liquidity and market access for clients,” Kaegi reiterated.
This UBS initiative on the Ethereum network becomes a new step for the crypto world. This highlights the great future potential of the fusion of traditional and decentralized finance.
A Company at the Vanguard of Blockchain Adaptation
It is not the first time that UBS has initiatives in the blockchain technology sector. In fact, the firm is one of the most committed to the adaptation of TradFi with DeFi and its recurring steps are testimony.
In November last year, the firm launched the first publicly traded digital bond in history. It has the ability to be settled on traditional exchanges and on compatible blockchain networks. Later, in December of that same year, UBS issued a $50 million tokenized fixed rate note.
By June 2023, the firm generated 200 million yuan in digitally structured notes for a third-party issuer. Consequently, it is a chain of developments that has been gaining space as the months go by.
The most recent UBS pilot program on Ethereum is part of the so-called Project Guardian. This is a collaborative industry initiative led by the Monetary Authority of Singapore. It should be noted that this bond has the structure of a variable capital company, which allows it greater reach from that city state.
By Leonardo Pérez
