The fund is available on Ethereum blockchain and will only be distributed by authorized partners only.
UBS Asset Management (UBS), one of the world’s largest wealth managers, has made a landmark move into blockchain-based finance, unveiling its first tokenized money market fund on the Ethereum blockchain.
According to an official announcement on Friday, the fund, known as the “UBS USD Money Market Investment Fund Token” (uMINT), aims to provide investors with secure access to a tokenized cash management tool available exclusively through select distribution partners.
UBS Sees Increased Demand for Tokenized Assets
The company said the investment product was created in response to rising investor demand for tokenized assets. By combining blockchain’s efficiencies with UBS’s established investment standards, the fund offers clients access to high-quality money market instruments in a digital format, all managed within a risk-sensitive framework.
Thomas Kaegi, Co-Head of UBS Asset Management in the Asia-Pacific region, said that UBS is leveraging its capabilities and working closely with regulators to bring innovative financial products to the market.
“We have seen a growing investor appetite for tokenized financial assets across asset classes. Through leveraging our global capabilities and collaborating with peers and regulators, we can now provide clients with an innovative solution,” Kaegi said.
The launch of uMINT fits into UBS’s broader strategy of adopting distributed ledger technology (DLT) across various fund management processes. The company aims to modernize fund distribution and issuance by using both public and private blockchains to streamline clients’ access to financial products.
A Broader Push Towards Digital Asset Integration
The wealth management firm has previously engaged with a series of initiatives in digital finance. Last year, UBS participated in the Monetary Authority of Singapore’s (MAS) Project Guardian, which explored tokenized finance models.
As part of this project, the company piloted a Variable Capital Company (VCC) fund with tokenized assets, demonstrating the potential for digital transformation within the regulated finance space.
To further showcase its commitment to blockchain, UBS executed several key digital finance projects. In mid-2023, the company issued CNH 200 million in fully digital structured notes for an external issuer. Additionally, the wealth manager completed a notable cross-border repurchase transaction using a digital bond on a public blockchain in late 2023, marking a first in the industry.
Meanwhile, UBS is not the only fund manager exploring the use of blockchain to bridge the gap between the crypto economy and the traditional market. On Thursday, Franklin Templeton announced that it is bringing its OnChain US Government Money Fund (FOBXX) to the Base network.
New chain unlocked. Benji, our proprietary blockchain-integrated recordkeeping system, is now live on @base! With this announcement, Franklin Templeton is the first asset manager to build a tokenized fund on Base.
Base is a layer 2 blockchain built on Ethereum designed to… pic.twitter.com/lRij7HchSl
— Franklin Templeton Digital Assets (@FTDA_US) October 31, 2024
The fund marked the first tokenized product on the Coinbase-owned protocol. However, it is important to note that FOBXX had previously launched on other blockchain networks such as Stellar, Polygon, and Arbitrum.
Other asset managers, such as BlackRock, have also introduced their funds on the blockchain. The company’s BlackRock USD Institutional Digital Liquidity Fund (BUIDL) became the largest tokenized money on the blockchain in May 2024, when it reached $375 million, surpassing Franklin Templeton’s product then.
In July, Coinspeaker reported the fund reached around $491 million, cementing BlackRock’s position as a global leader in financial services.
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