Chainlink, UBS, and DigiFT join forces! Partnering to pilot automated tokenization funds in Hong Kong.

UBS Group (UBS), Oracle Machine service provider Chainlink and RWA digital asset exchange DigiFT announced on 9/11 that they will launch a "Automated Tokenization Fund" pilot program in Hong Kong, which has been approved by the "Blockchain and Digital Assets Pilot Subsidy Scheme" of Hong Kong Cyberport (Cyberport).

Background of the Tripartite Cooperation to Launch the RWA Pilot Program in Hong Kong

DigiFT is a compliant RWA digital asset exchange licensed in both Singapore and Hong Kong. It collaborates with the Oracle Machine service provider Chainlink and UBS Group's internal tokenization service UBS Tokenize to jointly propose an automated tokenization fund solution.

According to a third-party announcement, the plan has received subsidies and official recognition from Hong Kong Cyberport, becoming an exclusive testing platform specifically for testing new cryptocurrency and Blockchain applications, and establishing a regulated Blockchain system to handle fund issuance, settlement, and subsequent management processes.

System operation process fully disclosed: Subscription and redemption are all automated on-chain operations.

The announcement pointed out that if investors want to subscribe to or redeem UBS's tokenized fund products, they will first submit instructions through DigiFT's compliance smart contract. These instructions will be handled by the smart contract of Chainlink "(Digital Transfer Agent)", which is responsible for verifying instructions and recording them on the chain.

After the verification is completed, the system will automatically initiate the subsequent processes, including the issuance, redemption, or other management actions of the tokenized fund, and will follow the tokenization product issuance standards set by the Swiss Capital Market Technology Association (CMTA), ensuring that the process is consistent with the existing digital securities regulations.

The goal is to fully automate every step of fund issuance management, balancing efficiency and compliance.

Reduce human errors and improve efficiency, DigiFT assists in providing compliance feedback.

The announcement states that traditional fund operations often require manual reconciliation and adjustments, which are cumbersome and prone to errors, potentially leading to inconsistencies between the fund's net asset value and actual assets. By utilizing automated blockchain infrastructure, it is possible to reduce error rates and improve efficiency, thereby saving operational costs and providing higher returns for fund operators, or directly benefiting investors.

DigiFT has the background of holding dual compliance licenses in Singapore and Hong Kong, and will be responsible for providing technical and compliance feedback in the program to ensure that this system meets the compliance and cross-system interoperability requirements of financial institutions in Hong Kong.

This plan is part of the "Blockchain and Digital Asset Pilot Subsidy Scheme" of Hong Kong Cyberport. In addition to tokenization funds, the plan is also exploring decentralized identity verification, payments and stablecoins, as well as blockchain applications that combine social innovation and digital experiences.

China may strengthen regulations, putting pressure on Hong Kong's crypto innovation.

Overall, while Hong Kong has a clear regulatory framework for digital assets, it still needs to comply with relevant Chinese policies.

According to reports, China may introduce a new round of cryptocurrency restrictions on local enterprises operating in Hong Kong. This makes Hong Kong an important testing ground for the integration of global cryptocurrency and traditional finance, and also makes this tripartite automated tokenization fund project particularly noteworthy.

( HK Monetary Authority: Public chain cryptocurrency implements risk control, banks can lower capital thresholds for holdings )

This article Chainlink, UBS, and DigiFT join forces! Partnering with Hong Kong to pilot automated tokenization funds first appeared in Chain News ABMedia.