MAS’ Project Guardian pilots settlement of tokenised fund subscriptions and redemptions using Swift
A pilot conducted under the Monetary Authority of Singapore’s (MAS) Project Guardian has successfully demonstrated the settlement of tokenised fund subscriptions and redemptions using the Swift network.
MAS’ Project Guardian completes new tokenisation pilot
The initiative, led by Swift, UBS Asset Management and blockchain platform Chainlink, showcased how tokenised assets and blockchain technology can be bridged with traditional fiat-based payment systems to ensure secure, cross-border transactions between investors, fund managers and financial institutions.
The trio tested the settlement of subscriptions and redemptions for tokenised investment fund vehicles, which refers to the buying and selling of digital tokens representing shares in an investment fund.
Swift provided the pilot with end-to-end payment orchestration infrastructure for fund settlement, while Chainlink facilitated pre-conditioning between the respective parties and UBS Asset Management minted tokens using its tokenised investment fund.
According to a joint statement, this testing resulted in “the straight-through-processing of the payment leg without the need for the global adoption of an on-chain form of payment”.
Automating the fund redemption and subscription lifecycle could potentially overcome a number of legacy barriers faced by traditional fund operations, including manual interventions and delayed settlements.
Meanwhile, UBS Asset Management also came together with Singapore-based digital solutions provider SBI Digital Markets this month, which is also an active member of Project Guardian.
Under the initiative of Project Guardian, the pair are seeking to connect regulated digital asset exchanges across multiple jurisdictions by creating a new framework for the primary and secondary market distribution of tokenised securities.
