A pilot including the use of the Swift network to settle tokenised fund subscriptions and redemptions has been successfully concluded by Chainlink, UBS Asset Management, and Swift.
This effort would allow digital asset transactions to be settled with fiat payment systems at a staggering 11,500 financial institutions in over 200 countries and territories.
Go deeper with GlobalData
Manual interventions, delayed settlements, and a lack of real-time transparency are just a few of the inefficiencies that traditional fund operations frequently encounter in their subscription and redemption procedures.
In the $63trn worldwide mutual fund market, these inefficiencies result in higher operating expenses, decreased liquidity, and lost investment possibilities.
The pilot demonstrated how financial institutions can settle subscriptions and redemptions for tokenised investment fund vehicles using blockchain technology, the Chainlink platform, and the Swift network.
It enables the payment leg to be processed directly, negating the need for an on-chain payment method to be adopted globally. This facilitates the automation of the entire fund redemption and subscription procedure.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe pilot expands on work done to develop a Digital Subscription and Redemption system for tokenised funds in collaboration with SBI Digital Markets and UBS Asset Management. This project is also a component of MAS’ Project Guardian, an international collaboration between major industry participants and policymakers to improve financial market efficiency and liquidity through asset tokenisation.
Moreover, the pilot settled fund subscriptions and redemptions by utilising the Swift infrastructure that was already in place, which allows for complete payment orchestration capabilities.
In order to meet the requirements for a UBS tokenized investment fund to automatically mint or burn fund tokens for investors, Swift formerly showed how its infrastructure can offer financial institutions a safe, scalable means of connecting to various blockchain types.
This most recent pilot with Chainlink’s platform coordinated the required interactions between each of the respective actors.
Jonathan Ehrenfeld, head of Strategy, Swift stated: “For digital assets to be adopted globally, they must seamlessly integrate with both existing payment systems and digital currencies. Our work with UBS Asset Management and Chainlink in MAS’ Project Guardian leverages the global Swift network to bridge digital assets with established systems. This initiative aligns with our strategy to provide our community of financial institutions with a secure and scalable way to transact across multiple digital asset classes and currencies, leveraging Swift’s existing infrastructure.”
Sergey Nazarov, co-founder of Chainlink added: “This exploration with Swift, UBS Asset Management, and Chainlink is a major milestone for the entire blockchain industry and capital markets. Chainlink is enabling institutions to reuse Swift’s infrastructure to facilitate payments for digital asset transactions. I am very excited by the upcoming adoption of these off-chain payment capabilities and how they will increase the flow of capital and expand the possible user base of digital assets.”
