Swift, Chainlink, and UBS Complete Pilot to Bridge Tokenized Assets with Fiat Systems

• Swift’s network supports digital asset integration across 11,500 financial institutions, enhancing tokenized fund transactions globally.
• Blockchain-enabled automation by Chainlink and Swift streamlines tokenized fund subscriptions without requiring on-chain payments.
• The pilot aligns with MAS’ Project Guardian, supporting efficient fund redemptions and boosting liquidity via secure digital pathways.

Swift, Chainlink, and UBS Asset Management have completed a pilot that connects tokenized fund transactions to traditional fiat payment systems. This initiative, aimed at transforming fund subscriptions and redemptions through blockchain, utilizes the Swift network’s global infrastructure, which spans over 11,500 financial institutions in 200+ countries. By integrating blockchain with traditional systems, the pilot allows digital assets to interact seamlessly with existing fiat-based frameworks.

Revolutionizing Traditional Fund Processes

Current fund operations face various challenges, particularly with subscription and redemption procedures, which often involve manual processing and delayed settlements. These inefficiencies result in higher operational costs, reduced liquidity, and limited transparency. 

With the help of blockchain technology, Chainlink’s platform, and Swift’s existing infrastructure, the pilot demonstrated a fully automated process for managing tokenized funds. This model permits straight-through processing for payments, streamlining the subscription and redemption lifecycle without requiring a wholesale shift to on-chain currencies.

Enabling a Digital Subscription and Redemption System

The pilot draws from earlier efforts with UBS Asset Management and SBI Digital Markets, introducing a Digital Subscription and Redemption system that offers a fully automated solution for tokenized funds. 

Swift’s network facilitated secure and seamless connections between financial institutions, orchestrating interactions to meet the specific requirements for minting or burning tokens in UBS’s tokenized funds. The project also aligns with MAS’ Project Guardian, a collaborative global initiative to promote asset tokenization, boost liquidity, and enhance efficiency in financial markets.

Swift’s Vision for Integrating Digital and Fiat Payments

Jonathan Ehrenfeld, Swift’s Head of Strategy, noted that the integration of digital assets with fiat systems is essential for widespread adoption. This pilot, part of Project Guardian, leverages Swift’s global network to bridge the gap between digital assets and existing systems, positioning the network as a secure and scalable means for transacting across multiple asset classes and currencies. Chainlink co-founder Sergey Nazarov highlighted that Swift’s infrastructure is instrumental in expanding digital asset access, increasing capital flow, and accommodating a broader user base.