UBS launches tokenized fund, puts ETH 'into the heart' of TradFi

The Union Bank of Switzerland (UBS) has rolled out a tokenized fund on the Ethereum blockchain network after highlighting the increasing interest among investors for tokenized financial assets. 

In a Nov. 1 statement, the bank launched the money market fund built on the Ethereum network as the “UBS USD Money Market Investment Fund Token,” also known as the “uMINT.”

UBS APAC co-head Thomas Kaegi explained that the firm has “seen a growing investor appetite for tokenized financial assets across asset classes.” 

Crypto commentators are bullish that the move will have a positive impact on Ether’s ETHUSD price.

Growing investor appetite for tokenized financial assets

“This move is like putting ETH right into the heart of traditional finance,” popular crypto show Mario Nawfal’s Roundtable wrote in a Nov. 1 X post.

“If big banks are ready to play, it’s only a matter of time before tokenized assets go mainstream,” Mario Nawfal’s Roundtable added.

Meanwhile, crypto analyst Tony Edward commented on the news, saying, “If you don’t have some exposure to ETH, you’re going to miss out on gains.” At the time of publication, Ether is trading at $2,515, according to CoinMarketCap data.

UBS explained that token holders will be able to leverage its “institutional-grade cash management solutions,” which rely on high-quality money market instruments and are structured around a “conservative, risk-managed framework.”

It comes a year after the bank first tested a controlled pilot of the tokenized money market fund.

In October 2023, UBS launched the pilot through the bank’s in-house tokenization service called UBS Tokenize. Using a smart contract on Ethereum, the firm carried out various activities, including redemptions and fund subscriptions.

Financial institutions flocking to blockchain networks

Meanwhile, a string of financial institutions have recently launched tokenized money funds on blockchain networks.

On Oct. 31, Cointelegraph reported that Franklin Templeton is launching its tokenized money fund on Base, Coinbase’s layer-2 network.

The Franklin OnChain US Government Money Fund (FOBXX) was the first tokenized fund to launch on Base.

Created in 2021, FOBXX has previously launched on blockchain networks, including Stellar, Polygon and Arbitrum.

Just a day before, on Oct. 30, Libeara, a blockchain asset tokenization platform, and FundBridge Capital, a fund management infrastructure, launched a tokenized United States Treasuries fund on a public blockchain for investors.

On May 1, BlackRock’s USD Institutional Digital Liquidity Fund became the largest treasury fund tokenized on a blockchain after surpassing Franklin Templeton’s product.