Today UBS Asset Management announced the launch of its “UBS USD Money Market Investment Fund Token” (“uMINT”) which is “built on Ethereum distributed ledger technology”.
The Singapore fund will only be available through authorized distribution partners. That’s the case for most regulated entities, including BlackRock’s BUIDL money market fund where Securitize is a partner.
Previously UBS has actively engaged with the public Ethereum blockchain, using tokens that require permissions. However, Ethereum technology is also available in private environments. UBS uses both as part of UBS Tokenize, hence we’ve requested clarification, although the fund likely uses public blockchain.
“We have seen growing investor appetite for tokenized financial assets across asset classes,” said Thomas Kaegi, Co-Head of UBS Asset Management APAC. “Through leveraging our global capabilities and collaborating with peers and regulators, we can now provide clients with an innovative solution.”
Tokenized money market funds such as BUIDL, Franklin Templeton’s FOBXX, and now uMINT, currently mainly target the crypto investor class. The funds provide a safe place to park cash and earn yield.
However, in the future there will be a broader demand for these sorts of funds, especially those that are transferrable, enabling the ability to switch in and out of the funds almost instantly. That compares to typical funds that tend to have once a day redemptions. This feature is appealing beyond crypto investors to corporate treasurers and institutions.
UBS and tokenization
Meanwhile, UBS Asset Management has been active in tokenization for some time. Last year UBS Hong Kong worked with Bank of China Investment (BOCI) for BOCI’s issuance of CNH 200 million ($28m) in digital structured notes on the Ethereum public blockchain.
As part of Singapore’s Project Guardian initiative, UBS has engaged in several pilots. These included the pilot issuance of a tokenized money market fund by UBS Asset Management on the Ethereum blockchain using a Singapore variable capital company (VCC) structure. Plus, the bank was involved in the first institutional cross border repo trade on a public blockchain in conjunction with DBS and SBI Digital Asset Holdings.
UBS is also engaged in tokenized cash. It was one of the founders of Fnality, the institutional settlement network that tokenizes balances held at a central bank account.
