Crypto: SWIFT, UBS And Chainlink Launch A Groundbreaking Test To Revolutionize Tokenized Finance

SWIFT seems fully aware that traditional finance will soon have to coexist with modern alternatives, even ceding some ground to them. The numbers also show that the Web3 ecosystem is attracting increasing interest around tokenization solutions. Thus, SWIFT, UBS Asset Management, and Chainlink have recently tested a new solution allowing the settlement of tokenized fund transactions in fiat currency via the SWIFT network. A significant step for the future of digital finance.

Tokenization: Modernizing Fund Management with Blockchain

This pilot project, conducted under the Project Guardian initiative of the Monetary Authority of Singapore (MAS), aims to transform fund management processes. By integrating blockchain with fiat payments, SWIFT, with a project for instant transfers of RWA cryptos, hopes to facilitate and accelerate subscription and redemption transactions, especially for tokenized funds.

The issue? Improve speed and transparency while reducing operational costs.

As part of this test, the SWIFT network enabled real-time transactions between investors and tokenized funds, without needing to rely solely on “on-chain” payments. In other words, SWIFT is leveraging existing infrastructure to integrate digital assets without reinventing the wheel.

According to Jonathan Ehrenfeld, head of strategy at SWIFT:

“For digital assets to be adopted at scale, they must seamlessly integrate with existing payment systems.”

Some key figures:

• 11,500 institutions connected to the SWIFT network;
• Over 200 countries covered;
• Global fund market: $63 trillion;
• Potential market for tokenized securities: $4 trillion by 2030.

This pragmatic approach represents an opportunity for investors and asset managers to utilize a hybrid model, blending traditional finance and digital innovations. Thanks to Chainlink, which acts as a blockchain “oracle”, SWIFT can facilitate hybrid transactions, marking a step towards more modern finance.

Crypto-assets: Towards Massive Adoption through Existing Infrastructures

As crypto gains popularity, SWIFT and its partners are betting on their global infrastructure to capture this growth. The test in question, in partnership with UBS Asset Management and SBI Digital Markets, relies on Chainlink (LINK) to orchestrate payments for tokenized funds, particularly on Ethereum, where UBS has launched its “uMINT” fund.

This initiative clearly shows the intention of financial giants to not remain on the sidelines of the development of crypto-assets.

By relying on SWIFT and Chainlink networks, this test aims to make fund transactions smoother and automated. Gone are the tedious manual steps and delays! From now on, thanks to blockchain, the integration of fiat payments allows for increased transparency and efficiency.

According to Sergey Nazarov, co-founder of Chainlink, “this adoption of off-chain payments will promote capital flow and expand the base of users of digital assets.“

This project also aims to demonstrate the ability of financial institutions to manage digital assets without relying entirely on cryptos or blockchains. A welcome flexibility for crypto regulators, but also for investors who will be able to diversify their portfolios while enjoying better liquidity.

So, why would SWIFT and other financial giants like Goldman Sachs let this market of tokenized securities, which represents billions $ at stake, pass them by?