UBS Asset Management initiates real-time trials with the first successful implementation of a money market fund pilot program based on Ethereum.
As part of Project Guardian, UBS Asset Management recently successfully implemented the money market fund pilot program based on Ethereum. UBS intends to start a number of real-time pilots, this being the first.
UBS embraces the revolution in cryptocurrencies: Ethereum at the bank’s disposal
It was predicted that UBS Asset Management, a renowned international asset management company, will launch its first “live pilot project” involving an Ethereum-based money market fund tokenization.
Through this pilot, UBS Asset Management will be able to evaluate several aspects of the fund’s operations, including redemptions and subscriptions, directly on the blockchain.
UBS used UBS Tokenize, an internal tokenization service, for this project.
Furthermore the project, according to Thomas Kaegi, Head of UBS Asset Management for Singapore and Southeast Asia, marks a major advancement in our understanding of fund tokenization.
UBS is dedicated to collaborating with traditional financial institutions and fintech firms to enhance market liquidity and client access to financial markets. The company has experience tokenizing fixed income and structured products.
Furthermore, UBS has long been at the forefront of blockchain technology research and use.
For instance, it issued a $50 million tokenized fixed-rate bond in December 2022, the first digital bond listed and regulated on blockchain and conventional exchanges in November 2022, and 200 million yuan of fully digital structured bonds in June 2023 on behalf of a third-party issuer.
UBS’s trial program’s significance for Project Guardian
Pioneered by the Monetary Authority of Singapore (MAS), Project Guardian is an industry collaboration project that includes UBS’s most recent tokenized money market fund prototype.
As a result of a regulatory innovation that applies to a broad spectrum of investment funds operating in Singapore, the fund has been set up as a variable capital corporation (VCC).
After the first pilot transactions were successfully launched, UBS Asset Management plans to investigate more realistic scenarios under Project Guardian.
This calls for more extensive cooperation with diverse partners and the examination of various investment approaches. As is well known, tokenization is a concept that is becoming more and more popular. It permits the movement of resources from the physical world to the digital realm.
Moreover tokenization has the revolutionary potential to completely change the global financial landscape by enabling the monitoring, trading, programmability, and management of digital assets, as highlighted by The Block Research in a recent paper.
Additional Ethereum news: Launch of ETFs by Bitwise on CME Futures
The Bitwise Ethereum Strategy ETF (AETH) and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP), two new Ethereum-related exchange-traded funds (ETFs), were just unveiled by Bitwise, one of the top cryptocurrency index fund managers in the US.
Moreover clients will be able to take part in Ethereum-related possibilities without having to invest directly in the underlying digital asset through these Ethereum-based ETFs, which will be based on CME futures.
The introduction of these futures ETFs by Bitwise is evidence of the institutional investors’ increasing interest. For both Ethereum funds, the Bank of New York Mellon will serve as custodian.
The CEO of Bitwise, Hunter Horsley, said:
“The two funds continue to expand our leading suite of crypto products, offering investors a broad range of options to access opportunities in the sector.”
Additionally, despite the recent bear market, the decentralized financial ecosystem on Ethereum has grown rapidly, with a total locked-in value of over $21 billion, indicating that the cryptocurrency market has growth prospects.
In fact, Horsley continued:
“Ethereum has become the leading operating system for cryptocurrencies, with blue-chip companies such as Nike, Starbucks, Adidas, Pepsi, PayPal, JPMorgan, and many others building and using applications on Ethereum. AETH and BTOP allow investors to participate in this growth with confidence through regulated ETFs.”
