Today, Swift, UBS Asset Management, and Chainlink announced the success of an innovative pilot for settling tokenized fund subscriptions and redemptions using the Swift network. This system would enable digital asset transactions to settle with fiat payment systems across more than 11,500 financial institutions in 200 countries and territories around the world.
The pilot builds on work from UBS Asset Management and SBI Digital Markets to create a digital subscription and redemption system for tokenized funds using Chainlink’s Cross-Chain Interoperability Protocol (CCIP). Both achievements are part of the Monetary Authority of Singapore’s Project Guardian, a global cooperation between policy makers and key industry players to enhance liquidity and efficiency of financial markets through asset tokenization.
Last year, Swift completed a proof of concept demonstrating how global financial institutions can transact with multiple blockchains using Swift private key infrastructure and CCIP. Last month, Swift was among eight major market participants in an industry initiative to combine Chainlink oracles and LLMs to structure and standardize corporate actions data onchain.
As the industry-leading decentralized computing platform, Chainlink has enabled over $16 trillion in transaction value and provides a full stack of essential infrastructure for creating and securing tokenized real-world assets. Over the past year, Chainlink has emerged as the preferred way for top financial institutions including the DTCC, Fidelity International and Sygnum to deliver key NAV and reserve data for tokenized funds onchain.
This latest advancement uses existing Swift infrastructure and Chainlink’s platform to settle fund subscriptions and redemptions by determining the preconditions to automatically mint or burn fund tokens for the UBS tokenized investment fund. Ultimately, this process can streamline operations and reduce costly inefficiencies throughout the $63 trillion global mutual fund market.
“For digital assets to be adopted globally, they must seamlessly integrate with both existing payment systems and digital currencies,” said Jonathan Ehrenfeld, Head of Strategy at Swift.
“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.”
Chainlink co-founder Sergey Nazarov underscored the collaboration as an important step in globally scaling onchain finance via tokenized assets that serve as unified golden records.
“Chainlink is enabling institutions to reuse Swift’s infrastructure to facilitate payments for digital asset transactions,” he said. “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.”