Global financial messaging network Swift, UBS Asset Management, and Chainlink have successfully demonstrated a new method for settling tokenised fund transactions in a recent pilot program.
This was conducted as part of the Monetary Authority of Singapore’s (MAS) Project Guardian, a global initiative involving industry leaders and policymakers to enhance liquidity and market efficiency through asset tokenisation.
The pilot showcased how financial institutions can use Swift’s infrastructure to facilitate off-chain cash settlements for tokenised funds with fiat payment systems across more than 11,500 financial institutions in over 200 countries.
It highlighted the potential for integrating blockchain technology with existing financial networks to improve the efficiency of fund subscription and redemption processes, which are traditionally hindered by manual procedures, delayed settlements, and limited transparency.
These challenges impact the US$63 trillion global mutual fund market, leading to increased operational costs and reduced liquidity.
The pilot provided a framework for automated processing, allowing seamless fund transactions without a global shift to on-chain payments.
Chainlink’s platform played a key role by coordinating interactions among stakeholders to meet conditions necessary for transactions, including the automatic minting and burning of fund tokens.
By partnering with UBS Asset Management and SBI Digital Markets, Swift further developed a digital subscription and redemption system for tokenised funds.
Swift’s existing infrastructure demonstrated its capability to securely connect financial institutions to multiple types of blockchain, building on its prior expertise.
“For digital assets to be adopted globally, they must seamlessly integrate with both existing payment systems and digital currencies. Our work with UBS Asset Management and Chainlink in MAS’ Project Guardian leverages the global Swift network to bridge digital assets with established systems.
This initiative aligns with our strategy to provide our community of financial institutions with a secure and scalable way to transact across multiple digital asset classes and currencies, leveraging Swift’s existing infrastructure.”
said Jonathan Ehrenfeld, Head of Strategy, Swift.
“This exploration with Swift, UBS Asset Management, and Chainlink is a major milestone for the entire blockchain industry and capital markets. Chainlink is enabling institutions to reuse Swift’s infrastructure to facilitate payments for digital asset transactions.
I am very excited by the upcoming adoption of these off-chain payment capabilities and how they will increase the flow of capital and expand the possible user base of digital assets.”
said Sergey Nazarov, Co-Founder of Chainlink.
