A pilot involving Swift, UBS Asset Management, and Chainlink has successfully demonstrated how tokenized fund subscriptions and redemptions can be settled over the Swift network.
This project, designed to integrate digital asset transactions with fiat payment systems, could potentially connect over 11,500 financial institutions across more than 200 countries and territories, enabling a seamless flow between blockchain-based assets and traditional financial infrastructures.
STP for tokenized funds addresses inefficiencies in mutual fund market
The pilot addresses inefficiencies in the mutual fund market, valued at $63 trillion globally, where fund subscriptions and redemptions are often hindered by manual processes, delayed settlements, and limited transparency. These challenges raise operational costs, impact liquidity, and reduce investment agility.
By leveraging Swift’s established network and Chainlink’s blockchain technology, the initiative aims to introduce straight-through processing for tokenized fund transactions, eliminating the need for an on-chain form of payment while fully automating the subscription and redemption lifecycle.
This pilot expands on previous collaborative work with UBS Asset Management and SBI Digital Markets, including development under Singapore’s Project Guardian—a global initiative to enhance financial market liquidity and efficiency through asset tokenization.
Swift’s infrastructure enabled end-to-end payment orchestration, while Chainlink’s platform facilitated interactions among network participants, enabling automatic minting or burning of fund tokens upon transaction completion.
“For digital assets to be adopted globally”
Jonathan Ehrenfeld, Head of Strategy at Swift, said: “For digital assets to be adopted globally, they must seamlessly integrate with both existing payment systems and digital currencies. 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.”
Sergey Nazarov, Co-Founder of Chainlink, commented: “Chainlink is enabling institutions to reuse Swift’s infrastructure to facilitate payments for digital asset transactions. 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.”
