Chainlink, UBS, and DigiFT Partner to Automate Tokenized Fund

Chainlink is the top decentralized oracle network. They have announced a strategic partnership with global wealth manager UBS and regulated Real World Asset (RWA) exchange DigiFT. This also automates tokenized fund operations on-chain. This initiative is part of the Hong Kong government’s Cyberport program. Also, with the goal of promoting blockchain adoption and digital asset infrastructure. The partnership is a giant leap in bridging the gap between traditional finance and blockchain technology, with the promise of efficiency, transparency, and scalability in institutional-grade tokenized asset management.

Partnership Summary and Participants

The collaboration involves three pivotal players in the blockchain and finance sectors. Chainlink is a decentralized oracle network that supplies smart contracts with real-world data, events, and off-chain computation. UBS is one of the world’s largest wealth management firms with $5.9 trillion in assets under management. It has a lot of institutional credibility to bring to the table, as well as access to markets. DigiFT is a regulated RWA exchange which focuses on bridging traditional finance to blockchain infrastructure and ensuring compliance and secure tokenized product management. Together, these entities are working to streamline tokenized fund operations, cut down on manual errors and enhance operational efficiency in the $132 trillion global asset management industry.

How the Initiative Works

The partnership brings a blockchain-based workflow for tokenized products, using Chainlink’s Digital Transfer Agent (DTA) smart contracts. Investors can place buy, sell or redemption orders for UBS’s tokenized products via DigiFT’s regulated distributor smart contracts. Chainlink’s DTA framework executes these orders automatically and records these transactions on-chain. This also triggers issuance, redemption, and other lifecycle activities of the fund directly on UBS’s tokenized product smart contracts. The automation means less manual errors, faster operation and transparency of recording all activities. The DTA framework is blockchain agnostic which means potential for scalability and adoption across multiple blockchain platforms.

Significance and Context

The initiative is under Hong Kong’s Blockchain & Digital Asset Pilot Subsidy Scheme under the Cyberport program. The program is designed to encourage the regulated blockchain solutions and make Hong Kong a leading hub for digital assets. In fact, Kevin Loo, CEO of DigiFT Hong Kong, stressed that the project is in line with the city’s vision of a strong digital asset ecosystem. He stressed the importance of developing long-term infrastructure, satisfying institutional standards and supporting tokenized finance with regulatory compliance. The collaboration demonstrates how traditional finance can adopt blockchain technology to modernize the operation of the funds.

Larger Implications for Asset Management

This partnership could revolutionise asset management operations by reducing the friction in operations, shortening processing times, and reducing costs. By automating the operation of funds on-chain, investors have increased transparency and confidence in tokenized products. The blockchain-agnostic nature of Chainlink’s DTA framework also opens up the possibility of global adoption for cross-border tokenized asset management and greater efficiency. Additionally, operating within a regulatory framework supported by the government ensures compliance and provides a blueprint for future blockchain-finance collaborations. The initiative showcases the increasing institutional acceptance of blockchain technology and the advantages of integrating decentralized infrastructure with conventional finance know-how.