Asset management company UBS announced it has completed a pilot trial of blockchain solutions that will help financial institutions simplify their services around token assets. The Swiss-based company currently has a market capitalization of over US$100.3 billion (about Rs 8.8 trillion). UBS works with Chainlink and Swift networks to delve into blockchain use cases for trial experimentation.
The solution tested by Chainlink, Swift and UBS is a “digital subscription and redemption system” for token funds. ChainLink is a decentralized blockchain network that connects chain data to smart contracts, while the Swift network is a secure messaging platform used by financial institutions.
Swift said in expanding development that the solution was created as part of the Project Guardian project under the supervision of the Singapore Monetary Authority (MAS).
“The new pilot demonstrates how financial institutions can promote chain-chain cash settlements for token funds. The initiative will enable digital asset transactions to reach settlements with the Fiat payment system of more than 11,500 financial institutions in more than 200 countries and regions,” the statement said. .
According to the payer’s report, Chainlink and Swift’s role in pilots is to demonstrate how blockchain can enhance the redemption and subscription process for token funds.
UBS initiated the process of creating the solution after identifying some of the inefficiencies that are prevalent in traditional financial operations. These setbacks include delays in settlements, a lack of real-time transparency and manual intervention.
“Financial institutions can leverage blockchain technology, chain link platforms and Swift networks to address subscriptions and redemptions of tokenized investment fund vehicles, allowing direct processing of payment legs without the need for global payment formats. This has Helps automate the entire life cycle of the fund redemption and subscription process.”
Understand blockchain and token funds
The blockchain network stores data and information in a small data packet instead of storing the data in a server. This makes the data even more attacked, thus bringing security to the fintech industry. In addition, the information recorded on the blockchain network will be permanently saved and cannot be changed. Large-scale financial institutions, such as JPMorgan Chase, Mastercard and Charter, are also exploring the use of blockchain in areas such as asset symbolization.
The process of creating digital units of physical or virtual attributes on a blockchain network is called asset tokenization. Setting up assets can increase the liquidity of assets. Token assets allow owners to quickly raise funds by issuing tokens on the blockchain, allowing others to buy and trade them on various exchanges.
