Leading Swiss bank UBS has launched a live trial of a tokenized version of its Variable Capital Corporation (VCC) fund as part of Project Guardian, an initiative led by the Singapore central bank.
In a press release, UBS Asset Management Announce 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, UBS Head of Asset Management for Singapore and Southeast Asia, the project is a milestone in the understanding of money tokenization. Keiji said:
“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 customers.”
UBS Asset Management has launched a controlled pilot program for a 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 financial subscriptions.
The pilot is also part of the company’s global distributed ledger technology strategy, which focuses on using private and public blockchains to enhance the distribution and issuance of money.
Related: Singapore is committing $112 million to support fintech solutions such as Web3
The new development fulfills previous expectations regarding the encoding of RWAs. In a panel discussion at the World Token Summit 2023, UAE government advisor Ellis Wang told Cointelegraph that tokenizing RWAs offers various benefits such as transparency and security, features that are built into blockchain. According to the CEO, tokenization of RWAs may spread, as it provides significant opportunities for many industries.
Earlier this year, protocols focused on RWAs became a hot topic as they outperformed other subsectors of DeFi. On June 9, RWA Centrifuge token gains are up 32% year-to-date.
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