UBS Asset Management issued a pilot tokenized money market fund on the Ethereum public blockchain. It is one of the controlled pilots that are part of the Monetary Authority of Singapore (MAS) Project Guardian.
“This is a key milestone in understanding the tokenization of funds, building on UBS’s expertise in tokenizing bonds and structured products,” Thomas Kaegi, Head of UBS Asset Management, Singapore & Southeast Asia. “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 clients.”
A key advantage of tokenizing funds is greater liquidity through an expanded reach. That’s where public blockchain can help. If it’s possible to reduce fund distribution costs through technology, this translates to smaller denominations for investments – so-called fractionalization – which expands the pool of investors. High net worth individuals might invest in funds previously only accessible to institutions.
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