Blockchain company Chainlink, global financial messaging platform Swift, and the asset management unit of Swiss bank UBS have successfully completed a pilot project testing the settlement and redemption of fiat cash from tokenized funds. This pilot was part of the Monetary Authority of Singapore’s (MAS) Project Guardian.
The project demonstrated how Swift’s infrastructure can enable off-chain cash settlements for tokenized funds. It also highlighted how tokenization and blockchain technology can enhance Swift’s services for institutional investors. Swift currently connects over 11,500 financial institutions in more than 200 countries.
As more jurisdictions around the world introduce tokenized funds, the ability to quickly access cash becomes crucial for settling transactions. This is particularly important for the traditional finance industry, which deals with trillions of dollars in assets.
Sergey Nazarov, co-founder of Chainlink, stated that the pilot project with Swift showcases the potential benefits for various sectors of the financial services industry. The pilot allows traditional finance investors to subscribe to tokenized funds using the familiar Swift transfer system, rather than stablecoins, central bank digital currencies (CBDCs), or other digital assets.
Nazarov emphasized the importance of attracting institutional investors to the blockchain industry, where a significant portion of the world’s assets are held. By facilitating secure and reliable transactions through Swift and Chainlink, the pilot aims to encourage the flow of institutional capital into blockchain-based assets.
During the pilot, Swift’s system, in conjunction with Chainlink’s platform, facilitated the automatic creation and redemption of UBS tokenized fund tokens. This automated process streamlines transactions and ensures the efficient operation of tokenized funds.
The successful completion of this pilot project marks a significant step towards integrating traditional finance with blockchain technology. The collaboration between Chainlink, Swift, and UBS demonstrates the potential for enhancing financial services through innovative solutions. As the financial industry continues to evolve, partnerships like these pave the way for greater efficiency and accessibility in global transactions.
