Richard Parks Swift, in partnership with UBS Asset Management and blockchain firm Chainlink, recently wrapped up a pilot program that tested tokenized fund transactions on its existing financial network. This project, launched under Singapore’s Project Guardian, aims to explore the potential of blockchain in merging digital assets with the fiat payment infrastructure used by over 11,500 financial institutions globally.
The initiative focused on addressing delays and inefficiencies in fund transactions by automating subscription and redemption processes. According to Swift’s press release, the ultimate goal is to reduce costs and improve transparency in fund operations.
Tokenized funds, a growing trend in finance, involve digitally representing traditional assets like mutual funds and stocks on a blockchain. This digital representation allows for faster, more secure transactions by automating processes and eliminating some of the manual steps typically involved.
Unlike other blockchain-based payment systems, this pilot did not require a new network. Instead, it demonstrated how Swift’s existing infrastructure could manage fiat payments for digital assets, creating a hybrid solution that integrates blockchain without overhauling the current system. This approach enables automated subscription and redemption of tokenized funds, potentially reducing costs and enabling real-time transparency.
The pilot also utilized Chainlink’s technology to manage blockchain interactions, while Swift’s network facilitated fiat transactions. Together, this setup achieved end-to-end automation without disrupting existing financial systems.
This pilot reflects the Monetary Authority of Singapore’s broader efforts to improve financial market efficiency and liquidity, reinforcing the potential of tokenized assets and blockchain technology to transform traditional financial processes.