Chainlink, in partnership with Swift and UBS, has introduced a groundbreaking system that allows banks and asset managers to process tokenized fund subscriptions and redemptions using their existing messaging infrastructure. This innovative solution has the potential to drive digital asset adoption in the $100 trillion global fund industry by eliminating a key technical barrier.
The collaboration between Chainlink, Swift, and UBS builds upon their previous work in the Monetary Authority of Singapore’s Project Guardian in 2024, where they tested tokenized asset settlement with off-chain cash. In this latest pilot, UBS Tokenize, the bank’s tokenization unit, successfully handled fund subscription and redemption requests.
Messages formatted in Swift’s ISO 20022 standard were routed through Chainlink’s Runtime Environment (CRE), which then triggered onchain smart contract actions using Chainlink’s Digital Transfer Agent standard. By leveraging existing Swift infrastructure, institutions can seamlessly interact with blockchain networks without the need for extensive system upgrades.
This “plug-and-play” model allows institutions to explore tokenized funds without the complexity and cost of building entirely new systems. The implications for the fund industry are significant, as managing tokenized workflows directly from legacy infrastructure can revolutionize the global asset management sector, driving operational modernization and cost reduction.
Utilizing Swift to trigger onchain events streamlines reconciliation processes, enhances compliance automation, and boosts transparency. Chainlink co-founder Sergey Nazarov emphasized how this collaboration showcases the efficiency that smart contracts and new technical standards can bring to the asset lifecycle.
UBS is also showcasing how banks can leverage tokenization to enhance existing products and explore new distribution models. The tokenization of funds has become a focal point for financial institutions and regulators looking to improve settlement speed, reduce operational risk, and unlock new market flexibility.
Innovations like the integration between Chainlink and Swift have the potential to move tokenization from isolated pilots to widespread adoption across global capital markets. This collaboration marks a significant step forward in the evolution of digital asset adoption in the fund industry.