UBS Asset Management has initiated its inaugural live pilot of a tokenized Variable Capital Company (VCC) fund as part of Project Guardian, led by the Monetary Authority of Singapore (MAS).

This initiative aims to bring real-world assets onto the blockchain, a response to a recent uptick in foreign inflows. 

The fund operates as a smart contract on the Ethereum blockchain, streamlining processes like investment acceptance and withdrawal processing.

UBS Asset Management views the recent move as a pivotal milestone in their exploration of fund tokenization, building upon their prior expertise in tokenizing bonds and structured products.

It builds on the company's broader global distributed ledger technology strategy, which focuses on harnessing both public and private blockchain networks to enhance fund issuance and distribution.

To highlight commitment to blockchain innovation, UBS previously launched the world's first publicly traded digital bond in November 2022.

The following month, it has issued a USD 50 million tokenized fixed rate note, followed by originating USD 27.4 million in fully digital structured notes for a third-party issuer in June 2023.