Earlier this month we reported that UBS Asset Management piloted a tokenized money market fund on the Ethereum public blockchain. This was part of the Singapore Project Guardian experiments. After the initial trial, SBI Digital Markets collaborated with UBS, extending the functionality. SBI Digital Markets provides services for digital securities issuance, custody as well as advice.
In some ways, the trial involved role playing. The companies simulated scenarios between a fund manager, distributor and digital asset custodian who act as trust anchors. These are regulated financial institutions that screen verifiable credentials – or identity – creating a permissioned DeFi environment. Smart contracts were used for automation.
Each of the companies used its own digital asset infrastructure for the subscription and redemption of fund shares. Now SBI wants to use Project Guardian to explore commercialization models for tokenized funds with other participants – 16 institutions are involved. Notably, another Project Guardian participant is UK asset manager Schroders and fund distribution platform Calastone. Additionally, their regulator, the UK’s FCA joined the project this week.
“The success of our technical pilot with UBS Asset Management marks the first of more to come – we will be stepping up our global partnerships to build an open and interoperable network for digital assets,” said Winston Quek, CEO of SBI Digital Markets.
Meanwhile, sister firm AsiaNext is a joint venture between SBI and Switzerland’s SIX. It recently landed a Monetary Authority of Singapore (MAS) license as a Recognised Market Operator (RMO), allowing it to launch a secondary market for tokenized securities and funds.