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 November 18, noting that the solution brings automated tokenized fund management to market and uses the Chainlink (LINK) infrastructure. This solution allows users to automate their tokenized fund management processes, unlocking blockchain capabilities for the world’s $132 trillion in assets under management.
Currently, total real assets in the chain represent a market of approximately $13.2 billion.
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The solution enables efficient scaling of tokenized funds
According to a press release, the tokenized fund pilot demonstrated how fund managers can use smart contracts and Chainlink’s Cross-Chain Interoperability Protocol to efficiently scale their products on-chain and across distributors.
Central to this initiative is Digital Transfer Agent’s smart contract model, a new fund administration system that leverages multiple Chainlink oracle networks. SBI’s custodian and fund distributor has successfully used this model to enable subscriptions and redemptions across multiple chains.
As the tokenized fund industry evolves to attract the world’s top players, the demand for on-chain management is increasing. In particular, a recent report found that 93% of fund service providers do not offer full automation for their data entry and workflow processes. This lack of automation creates significant bottlenecks for traditional fund managers.
However, smart contracts, oracle networks and tokenized funds offer the asset management industry a path to full automation.
“This new way to launch fund structures and manage them through smart contracts will enable both fund managers and their service providers to deliver new on-chain financial products and reduce operational costs for investors, both things they are actively looking for” , said Winston Quek, CEO at SBI Digital Markets.
The solution, which is currently live on several blockchain testnets, will soon be heading to 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 aimed at bridging tokenized assets with legacy payment systems. UBS also recently unveiled a cross-border payments pilot called “UBS Digital Cash”.
Read more: Swift, UBS and Chainlink pilot a blockchain tokenized fund