UBS launches tokenized fund, puts ETH ‘at the heart of TradFi’

The Swiss Union Bank (UBS) has released a tokenized fund on the Ethereum blockchain network after highlighting the growing interest among investors in financial assets.

In a statement on November 1, the bank launched a money market fund built on the Ethereum network, also known as the “UBS USD Money Market Investment Fund Token”.

UBS APAC co-head Thomas Keagy explained that the company “has seen growing investor interest in financial assets across property segments.”

Crypto analysts are adamant that the move will have a positive impact on the price of Ether (ETH).

Growing investor interest in tokenized financial assets

“This move is like putting ETH in the heart of traditional finance,” Mario Naufal Roundtable of the popular crypto show wrote in a November 1 X post.

“It's only a matter of time before the big banks go from tokenized assets ready to play,” added Mario Naufal of the roundtable.

Meanwhile, crypto analyst Tony Edwards commented on the news, saying, “If you don't have some exposure to ETH, you're going to lose out.” According to CoinMarketCap data, Ether is trading at $2,515 at the time of publication.

UBS explained that token holders can use “institutional-grade cash management solutions” that are backed by high-quality money market instruments and structured around a “conservative, risk-managed framework.”

It comes a year after the bank first piloted a regulated money market fund.

In October 2023, UBS launched the pilot of the bank's in-house tokenization service, UBS Tokenize. Using smart contracts on Ethereum, the organization has performed various functions including redemptions and fund registrations.

Financial institutions are flocking to blockchain networks.

Meanwhile, a string of financial institutions have recently launched tokenized funds on blockchain networks.

On October 31, Cointelegraph reported that Franklin Templeton is launching a tokenized currency fund on Base, Coinbase's Layer-2 network.

Franklin Onchain US Government Fund (FOBXX) was the first alternative fund to launch on the base.

In the year Created in 2021, FOBXX has already launched on blockchain networks including Stellar, Polygon and Arbittrum.

Related: ParaFi Capital to Raise $1.2B Fund in Securities

Just a day before, on October 30, Libera, a blockchain asset tokenization platform, and FundBridge Capital, a fund management infrastructure, launched a tokenized US Treasury fund for investors on the public blockchain.

On May 1, BlackRock US Dollar Institutional Digital Liquidity Fund surpassed Franklin Templeton's product to become the largest blockchain-certified treasury fund.

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