Last November UBS Asset Management launched its UBS USD Money Market Investment Fund Token (“uMINT“) on the Ethereum public blockchain. So far its issuance is modest at just shy of $25 million, although most of the large tokenized money market funds (MMFs) achieved their scale by being used as stablecoin collateral. uMINT’s primary distributor, DigiFT, always envisioned the token being used as collateral for crypto derivatives trading. Now it has achieved that objective with a deal with major cryptocurrency exchange KuCoin.
The token will be held by custodians off exchange, which provides many investors with peace of mind following the collapse of the FTX exchange. DigiFT has formal relationships with several top custodians, which may help ensure compliance and locking assets as collateral. uMINT can only be exchanged between institutional token holders, with the allow list controlled by DigiFT, which is regulated in both Singapore and Hong Kong.
This controlled access becomes particularly important given Seychelles-based KuCoin’s regulatory status as amongst the most lightly regulated of the large crypto exchanges. Unlike other exchanges, its website does not list any licenses, although it has applied for ones in Turkey and the EU via Austria. However, it is banned in the Netherlands and France, with a warning in the UK. In January it pled guilty in the US to operating as an unlicensed money transmitter, paying fines of almost $300 million and agreeing to exit the US market for two years. Other regions where the KuCoin exchange is unavailable include Singapore, Hong Kong and China.
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