Swiss Banking Giant UBS Launches First Tokenized Fund on Ethereum

Switzerland’s largest bank USB has launched its first tokenized investment fund on the Ethereum network, its first tokenized product on the network. The bank, which manages $5.7 trillion in assets, achieved a notable milestone after launching the asset. The investment vehicle, called USB USD Money Market Investment Fund Token (uMINT), aims to bridge the gap between traditional finance and digital technology.

uMINT holders will gain exclusive access to USB’s institutional-grade cash management solutions. The Ethereum-based digital token allows users to invest in Swiss banks’ money market instruments, which are characterized by a conservative and risk-averse framework.

USB enters asset tokenization
The latest launch by the leading bank is part of its global distributed ledger technology strategy. USB’s asset management arm aims to leverage public and private blockchains with smart contract capabilities to enhance the issuance and distribution of funds. Switzerland’s largest bank began exploring blockchain technology as early as 2023 through its in-house provider USB Tokenize, which led to USB Asset Management launching a live pilot of its Ethereum-based tokenized Variable Capital Company (VCC) fund in the same year.

Meanwhile, USB Asset Management has conducted other notable blockchain-based transactions. For example, using its locally issued digital bond, it executed the world’s first cross-border repo transaction on a public blockchain.

Asset tokenization surges in traditional finance
Recently, there has been a rise in interest in the tokenization of real-world assets (RWAs) as traditional financial institutions leverage this technology to enhance their market presence. Leading asset managers such as BlackRock and Franklin Templeton have expressed interest in this emerging trend.

For background, Franklin Templeton recently expanded trading of its OnChain U.S. government money market fund, FOBXX, to Coinbase’s second-layer scaling solution, Base. The fund now trades on six blockchains, including Avalanche and Arbitrum. In March this year, BlackRock launched the tokenized fund BUIDL on Ethereum.

It is worth noting that chains such as XRPL and Cardano have also witnessed the development of asset tokenization. For example, XRP Ledger became the network of choice for a $1 billion tokenization collaboration between Zoniqx and Aurum Equity Partners. Cardano’s EMURGO is also bringing tokenized gold to the blockchain through a partnership with Kinka Gold to launch XNK. The Cardano network has also attracted German tokenization platform Finest to launch tokenized gold on the blockchain.

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