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SBI Digital Markets, UBS Asset Management, and Chainlink have successfully completed a pilot program showcasing the use of smart contracts to manage tokenized funds.
The companies announced this on Nov. 18, noting that the solution brings automated tokenized fund management to the market and leverages the Chainlink (LINK) infrastructure. With this solution, users can automate their tokenized fund management processes, unlocking blockchain capabilities for the world’s $132 trillion assets under management market.
urrently, the total real-world assets on-chain represent a market of around $13.2 billion.
Solution allows for efficient scaling of tokenized funds
According to a press release, the tokenized fund pilot demonstrated how fund managers can leverage smart contracts and Chainlink’s Cross-Chain Interoperability Protocol to efficiently scale their products on-chain and across distributors.
Central to this initiative is the Digital Transfer Agent smart contract model, a novel fund administration system that utilizes multiple Chainlink oracle networks. SBI’s custodian and fund distributor successfully deployed this model to enable multi-chain subscriptions and redemptions.
As the tokenized funds industry evolves to attract the world’s top players, the demand for on-chain administration is increasing. Notably, a recent report revealed that 93% of fund services providers do not offer full automation for their data inputs and workflow processes. This lack of automation creates key bottlenecks for traditional fund operators.
However, smart contracts, oracle networks, and tokenized funds provide the asset management industry with a pathway to full automation.
“This new way of launching fund structures and administering them via smart contracts empowers both fund managers and their service providers to deliver new on-chain financial products and lower operational costs to investors, both things they are actively looking for,” said Winston Quek, chief executive officer at SBI Digital Markets.
The solution, currently live on various blockchain testnets, will soon go to mainnet.
SBI Digital Markets, UBS Asset Management, and Chainlink announced the solution at the Singapore Fintech Festival, launching it as part of the Monetary Authority of Singapore’s ‘Project Guardian.’
This development follows a partnership between Swift, UBS Asset Management, and Chainlink aimed at bridging tokenized assets with legacy payment systems. UBS also recently unveiled a pilot for cross-border payments called “UBS Digital Cash”.