Launched as part of the Monetary Authority of Singapore’s (MAS) Project Guardian, new pilot demonstrates how financial institutions can leverage existing Swift infrastructure to facilitate off-chain cash settlements for tokenized funds.
Singapore, 5 November 2024 – Swift, UBS Asset Management, and Chainlink have successfully completed a pilot for settling tokenized fund subscriptions and redemptions using the Swift network. This initiative would enable digital asset transactions to settle with fiat payment systems across more than 11,500 financial institutions, across over 200 countries and territories.
Traditional fund operations often face inefficiencies in subscription and redemption processes, including manual interventions, delayed settlements, and a lack of real-time transparency. These inefficiencies lead to increased operational costs, reduced liquidity, and missed investment opportunities across the $63 trillion global mutual fund market. The pilot showed how financial institutions can leverage blockchain technology, the Chainlink platform and the Swift network to settle subscriptions and redemptions for tokenized investment fund vehicles, thereby allowing the straight-through-processing of the payment leg without the need for the global adoption of an on-chain form of payment. This helps in the automation of the entire lifecycle of the fund redemption and subscription process.
The pilot builds on work with UBS Asset Management and SBI Digital Markets to create a Digital Subscription and Redemption system for tokenized funds. This initiative is also part of MAS’ Project Guardian, a global cooperation between policy makers and key industry players to enhance liquidity and efficiency of financial markets through asset tokenization. The pilot used existing Swift infrastructure which enables end-to-end payment orchestration capabilities to settle fund subscriptions and redemptions. Swift previously demonstrated how its infrastructure can provide a secure, scalable way for financial institutions to connect to multiple types of blockchain, and this latest pilot with Chainlink’s platform orchestrated the necessary interactions between each of the respective actors to fulfil the pre-conditions for which a UBS tokenized investment fund will automatically mint or burn fund tokens for investors.
“For digital assets to be adopted globally, they must seamlessly integrate with both existing payment systems and digital currencies," said Jonathan Ehrenfeld, Head of Strategy, Swift. "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.”
"Chainlink is enabling institutions to reuse Swift's infrastructure to facilitate payments for digital asset transactions," said Sergey Nazarov, Co-Founder of Chainlink. " 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."
PRESS CONTACTS
FGS Global
+32 (0)2655 3377
swift@fgsglobal.com
ABOUT SWIFT
Swift is a global member owned cooperative and the world’s leading provider of secure financial messaging services. We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and regulatory compliance.
Our messaging platform, products and services connect more than 11,500 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories. While Swift does not hold funds or manage accounts on behalf of customers, we enable our global community of users to communicate securely, exchanging standardised financial messages in a reliable way, thereby supporting global and local financial flows, as well as trade and commerce all around the world.
As their trusted provider, we relentlessly pursue operational excellence; we support our community in addressing cyber threats; and we continually seek ways to lower costs, reduce risks and eliminate operational inefficiencies. Our products and services support our community’s access and integration, business intelligence, reference data and financial crime compliance needs. Swift also brings the financial community together – at global, regional and local levels – to shape market practice, define standards and debate issues of mutual interest or concern.
Headquartered in Belgium, Swift’s international governance and oversight reinforces the globally inclusive character of its cooperative structure. Swift’s global office network ensures an active presence in all the major financial centres.
