UBS Asset Management, the asset management division of Switzerland's largest financial conglomerate, has unveiled the launch of its inaugural live trial for a tokenized Variable Capital Company (VCC) fund.
Introduced in January 2020, the VCC framework aims to bolster Singapore's standing as a hub for fund management activities. UBS will harness its in-house digital asset tokenization service, UBS Tokenize, to initiate a controlled pilot of a tokenized money market fund, represented as a smart contract on the Ethereum blockchain, simplifying fund subscriptions and redemptions.
Thomas Kaegi, Head of UBS Asset Management, Singapore and Southeast Asia, highlights the significance of this milestone in understanding fund tokenization, building on UBS's expertise in tokenizing bonds and structured products. The project, part of the broader MAS-led VCC umbrella initiative, seeks to tokenize diverse real-world assets to enhance market liquidity and improve market access for clients by collaborating with both traditional financial institutions and fintech providers.
Variable Capital Companies (VCC) serve as an alternative corporate structure to limited partnerships and trust structures, as endorsed by the Monetary Authority of Singapore (MAS), the city-state's financial watchdog and central bank.
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