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 Singapore’s central bank.
In a press release, UBS Asset Management Announced that the fund is part of a broader VCC umbrella designed to bring different types of real-world assets (RWA) to the blockchain. According to Thomas Kaegi, head of Singapore and Southeast Asia at UBS Asset Management, the project is a milestone in the understanding of fund tokenization. Kaegi said:
“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.”
UBS Asset Management launched the controlled pilot of the tokenized money market fund through the company’s internal tokenization service called UBS Tokenize. Using a smart contract on ethereum, the company carried out 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 the use of public and private blockchains to improve the distribution and issuance of funds.
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The new development makes earlier predictions about RWA tokenization come true. In a panel discussion at the 2023 World Token Summit, UAE government advisor Ellis Wang told Cointelegraph that tokenization of real-world assets offers several advantages, such as transparency and security, which are built-in features. in blockchains. According to the executive, RWA tokenization can be successful as it presents important opportunities for many industries.
Earlier this year, RWA-focused protocols became a hot topic as they outperformed other subsectors of decentralized finance (DeFi). On June 9, a tokenization platform project RWA’s token earnings rose as much as 32% year-to-date (YTD) at that time.
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