UBS Launches Tokenized Investment Fund on Ethereum, Targeting Growing Investor Appetite

UBS follows BlackRock and Franklin Templeton, which have started tokenized funds backed by US Treasuries. Those funds are currently worth $530 million and $410 million, respectively.

Banking behemoth UBS is rolling out a tokenized investment fund on Ethereum, marking the latest pivot by a traditional finance giant toward public blockchains.

The Swiss bank joins the likes of BlackRock and Franklin Templeton, which have launched tokenized funds backed by US Treasuries. Those funds have grown to be worth $530 million and $410 million, respectively, according to data from RWA.xyz.

UBS’ USD Money Market Investment Fund Token, or uMINT, will be fully backed by “money market instruments,” the bank stated in a news release Friday. It was not immediately clear whether US Treasury assets will be included.

Spokespeople for UBS did not immediately return DL News’ request for comment Friday.

“We have seen growing investor appetite for tokenized financial assets across asset classes,” said Thomas Kaegi, co-head of UBS Asset Management’s Asian arm, in the statement.

The fund isn’t UBS’ first venture into crypto.

In 2022, the bank launched a publicly traded, digital bond that settles on a private blockchain. UBS was also a participant in a recent pilot program led by the Monetary Authority of Singapore to explore the tokenisation of traditional assets.

Despite the rollout of such crypto-based financial products, Wall Street has largely steered clear of the broader crypto economy.

“We go to jail if we don’t know who we’re trading with,” a BlackRock executive said at a conference hosted by Coinbase last year.

But the tokenisation of assets has been championed by financial powerhouses.

BlackRock CEO Larry Fink has stated that his end goal is “the tokenisation of every financial asset.”

Bernstein analysts called the March launch of BlackRock’s BUIDL “the next evolution of financial markets, similar to the ETF wave of the last two decades,” and “the first major test-case for institutional holders to experience 24/7 instant settlement benefits of the blockchain.”

Earlier this year, JPMorgan Chase and Visa also joined a project to test the feasibility of tokenising cash and other assets.

Money funds have been the most popular test case so far.

While they’re new to crypto, they’re already a fixture in the broader financial system.

The first money fund launched in 1971. Since then, the sector has amassed more than $6.4 trillion in assets in the US alone. That’s about three times the valuation of the entire cryptocurrency market, which currently sits at $2.1 trillion.

Aleks Gilbert is a DeFi correspondent based in New York. Have a tip? Contact him at aleks@dlnews.com.