Switzerland’s largest financial holding company UBS has launched its first tokenized investment fund, uMINT, which is a money market fund based on Ethereum’s decentralized ledger technology and will be offered through authorized distribution partners.
UBS Tokenize Continues to Expand Tokenization Services
In October 2023, UBS announced the launch of a pilot tokenized money market fund on Ethereum, which is part of the “Project Guardian” led by the Monetary Authority of Singapore (MAS). UBS is responsible for a trial that involves the direct issuance of Variable Capital Company (VCC) funds on a digital asset network. The aim is to enhance fund distribution, facilitate the trading of VCC fund shares in the secondary market, and improve the operational efficiency of the entire industry.
UBS Asset Management is continuously expanding its tokenization services through the company’s internal platform, UBS Tokenize, which supports opportunities throughout the entire asset lifecycle, including initiation, issuance, distribution, and custody, initially focusing on the tokenization of bonds, funds, and structured products. Now, it has launched the first tokenized investment fund, uMINT, which is a money market fund based on Ethereum’s decentralized ledger technology and will be offered through authorized distribution partners.
Thomas Kaegi, Head of UBS Asset Management for Asia Pacific, stated:
“We are witnessing growing interest from investors in tokenized financial assets across asset classes. Through our global reach and collaboration with peers and regulators, we can now offer innovative solutions to our clients.”
Major Traditional Financial Players Joining, Bright Future for RWA
According to data from RWA.xyz, the current on-chain RWA assets amount to $3.9 billion (excluding private credit), with Ethereum being the largest blockchain for the tokenization of real-world assets, having tokenized assets valued at over $3 billion. Among the asset classes, U.S. Treasury bonds dominate, amounting to $2.4 billion.
BlackRock’s BUIDL holds the highest market value for products containing U.S. Treasury bonds, exceeding $523 million, while Franklin Templeton’s FOBXX on-chain U.S. government money market fund has a market value of approximately $408 million.
RWA stands for Real World Assets, representing the introduction of many tangible or intangible assets from the non-blockchain world into the blockchain through tokenization technology, transforming them into assets that can be traded on-chain, known as “real asset tokenization.” This allows traditional finance (TradFi) to benefit from the efficiency, transparency, and speed of blockchain technology, while also enabling Web3 to access traditional financial investment products. Moreover, it serves as a bridge between TradFi and DeFi, allowing traditional financial assets to operate within the DeFi space and injecting substantial liquidity.
The successive entries of traditional financial giants like BlackRock, Franklin Templeton, and UBS also signify the increasing acceptance of the tokenization market.