The latest technology news in the wealth management sector from around the world.

UBS Asset Management has launched its first live pilot of a tokenized Variable Capital Company (VCC) fund – a structure that has operated in Singapore since the start of 2020.

The Swiss firm’s announcement adds to those of other firms about how technology linked to blockchain is changing financial transactions and affecting the structure of investment.

The tokenized VCC fund is part of a wider VCC umbrella designed to bring various “real world assets" on-chain as part of Project Guardian, which is a collaborative industry initiative led by the Monetary Authority of Singapore.

“Through this exploratory initiative, we will work with traditional financial institutions and fintech providers to help understand how to improve market liquidity and market access for clients,” Thomas Kaegi, head of UBS Asset Management, Singapore, and Southeast Asia, said.

Using UBS’s in-house tokenization service, UBS Tokenize, UBS Asset Management launched the controlled pilot of a tokenized money market fund. Represented as a smart contract on the Ethereum public blockchain, the pilot enables UBS Asset Management to carry out various activities including fund subscriptions and redemptions, UBS said. 

In March last year, UBS said it launched the world’s first digital bond that is publicly traded. In other examples of developments, Citi Treasury and Trade Solutions, part of Citigroup, announced its creation and piloting of Citi Token Services for cash management and trade finance.

The market for “asset tokenization” – a market driven by distributed ledger technology (aka blockchain) – could be as much as $16.1 trillion by the end of the decade, according to Boston Consulting Group and Singapore-based ADDX, a digital exchange for private markets. Major banks seek gains in issuance processes, faster settlement, reduced counterparty risk, and better liquidity management compared with traditional systems.