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    Swift, UBS, and Chainlink pilot tokenized fund settlement under Project Guardian

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    Under Project Guardian, financial messaging network Swift, UBS Asset Management, and blockchain network Chainlink have successfully piloted a system for tokenized fund settlement. The new method uses Swift’s international financial messaging system to combine tokenized fund and current money payment systems. Traditional fund transactions can be time consuming and expensive, however, Swift’s system allows real-time automatic and transparent transactions, without the need for a globally-accepted blockchain form of payment. The monetary authority of Singapore is looking to develop commercial use of tokenized assets using data from numerous trials.

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    Under the Singapore’s monetary authority’s program, Project Guardian, Swift, UBS Asset Management, and blockchain network Chainlink have successfully tested a new system for tokenized fund settlement. This new development uses Swift’s worldwide financial messaging network, which connects over 11,500 institutions, to blend tokenized fund systems with current money payment systems.

    In a fresh approach, this project allows transactions without needing blockchain-only payments, advancing digital finance using existing structures. This follows recent talks by Chainlink co-founder Sergey Nazarov at the Sibos conference organized by Swift. He spoke about the potential for blockchain to work with Swift.

    Traditional fund transactions can sometimes be slowed down by manual steps and waiting times for settlements, which causes operational costs and affects liquidity. A press release showed that Swift’s set up lets fund redemptions and subscriptions for tokenized funds happen in real-time. This makes the process automatic, cheaper, and transparent. Vital to note is that the new system can run without needing a blockchain form of payment to be globally accepted.

    According to Nazarov, this new development is exciting and the adoption of “off-chain payment capabilities” will lead to more money flow.

    Project Guardian’s pilot is based on the effort made by UBS and SBI Digital Markets. They have together created a Digital Subscription and Redemption system for tokenized funds. UBS launched a tokenized fund on the Ethereum blockchain on November 1 due to growing investor interest in tokenized financial assets. The UBS USD Money Market Investment Fund Token, or the “uMINT”, has been created with this in mind.

    The monetary authority in Singapore has declared its intention to develop the commercial use of tokenized assets, using data from more than 40 institutions and over 15 trials for guidance. Leong Sing Chiong, deputy managing director at the monetary authority of Singapore, discussed the potential of tokenization in foreign exchange and funds which was demonstrated through Project Guardian by major financial institutions. However, he pointed out that these trials have limitations and haven’t yet achieved industry wide traction.

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