Key Highlights:
- Chainlink, Swift and UBS together have developed a solution that lets banks manage tokenized funds through Swift and CRE.
- The pilot test showed smooth fund subscription and redemption via ISO 20022 Swift messages.
- This approach brings blockchain’s speed, transparency and efficiency to the $100 trillion fund industry.
Using Swift messaging and the Chainlink Runtime Environment (CRE), Chainlink has made a significant innovation by allowing financial institutions to manage digital asset operations straight from their existing systems. These solutions will allow the banks and other institutions to connect blockchains via the well-known Swift network without requiring expensive upgrades or changing the current procedure.
The project builds on use cases for tokenized assets that were previously demonstrated by Swift, Chainlink and UBS in the 2024 Project Guardian of the Monetary Authority of Singapore (MAS).
Pilot with UBS Tokenize
The first real use of this solution was tested with UBS Tokenize, the tokenization arm of UBS, one of the world’s biggest private banks managing more than $6 trillion.
In this trial, buying and selling shares of tokenized fund were carried out through ISO 20022 messages sent using the CRE and Swift systems. When CRE received a Swift message from UBS’s old setup, it started the fund subscription and redemption process on the blockchain using the Chainlink Digital Transfer Agent (DTA) standard. This approach lets banks keep using their existing ID and security systems but also lets them gain blockchain’s speed, automation, and transparency benefits.
Simplifying Tokenized Asset Workflows
By using CRE to conceal the technical difficulties of working with tokenized assets, this development goes far beyond the original concept. Financial institutions can use the same systems, which they are already familiar with and initiate a variety of blockchain events with simple Swift messages. The value of this type of global fund industry is more than $100 trillion.
Institutions can fully benefit from blockchain’s capabilities for tokenized fund workflows with this plug-and-play setup, including improved risk management, increased efficiency, simpler integration, and stronger operational control.
The pilot also tackles old problems in the global mutual fund market, where buying and redeeming shares is often faced with delays, high costs, and too much manual work. With this solution, cash will still settle off-chain through Swift’s network, while the tokenized fund workflows will run on the blockchain.
This makes the process more transparent and easier to monitor while doing away with the need for laborious reconciliation and manual compliance checks and there will be faster transactions, reduced risks, and increased liquidity in tokenized asset markets. Chainlink Co-Founder Sergey Nazarov calls it a milestone, as it shows how smart contracts can help transfer agents and other financial players adopt on-chain product lifecycle management.
Chainlink’s Growing Global Role
Leading financial institutions and protocols including Swift, Euroclear, Mastercard, Fidelity International, ANZ, UBS, Aave, GMX, and Lido, already use Chainlink’s protocol stack globally. It functions as an industry-standard oracle platform, providing advanced blockchain applications like lending payments, stablecoins and tokenized assets with reliable data, interoperability, compliance and privacy.
This announcement indicates an expanding collaboration between Chainlink, Swift, and large financial institutions such as UBS. From asset tokenization in MAS’s Project Guardian to a full scale integration that allows actual financial institutions to connect to blockchain with minimal disruption, their work has advanced through a number of pilots and projects.
This development is a big step towards making digital asset workflow common. It also depicts a future where blockchain and traditional finance work smoothly together.
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