SBI, UBS and Chainlink complete pilot for automated tokenized fund solution

SBI Digital Markets, UBS Asset Management and Chainlink have successfully completed a pilot program demonstrating the use of smart contracts to manage tokenized funds.

The companies announced this on November 18, stating that the solution brings automatic tokenized fund management to the market and strengthens the Chainlink (LINK) infrastructure. With this solution, users can unlock blockchain capabilities for the world’s $132 trillion presence in the management market by automating tokenized fund management processes.

Currently, the total real-world assets on the chain represent a market of approximately $13.2 billion.

The solution allows 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.

At the heart of this initiative is the Digital Transfer Broker smart contract model, a new fund management system that uses multiple Chainlink oracle networks. SBI’s custodian and fund distributor has successfully implemented this model to enable multi-chain subscriptions and payments.

As the tokenized fund industry evolves to attract the world’s top players, the demand for on-chain governance is also increasing. In particular, a recent report found that 93% of fund services providers do not offer full automation for data entries and workflow processes. This lack of automation creates significant bottlenecks for traditional fund operators.

But smart contracts, oracle networks, and tokenized funds are providing the asset management industry with a path to full automation.

“This new way of initiating fund structures and managing them through smart contracts empowers both fund managers and service providers to deliver new on-chain financial products and reduce operational costs to investors, both of which are actively sought,” said Winston Quek. He is the chief executive officer of SBI Digital Markets.

The solution, which is currently live on various blockchain test networks, will soon be transferred to the mainnet.

SBI Digital Markets, UBS Asset Management and Chainlink announced the solution at the Singapore Fintech Festival and launched it as part of the Monetary Authority of Singapore’s ‘Project Guardian’.

This development follows a partnership between Swift, UBS Asset Management and Chainlink that aims to bridge tokenized assets and legacy payment systems. UBS also recently announced a pilot for cross-border payments called “UBS Digital Cash.”