Swift, Chainlink wrap tokenization pilot
A pilot project from Swift, UBS and Chainlink demonstrates how tokenized funds can bridge traditional and crypto rails
Vachagan Malkhasyan/Shutterstock modified by Blockworks
This is a segment from the 0xResearch newsletter. To read full editions, subscribe.
Swift, UBS Asset Management and Chainlink announced today the successful conclusion of a pilot project demonstrating the integration of traditional payment systems with tokenized assets.
Part of the Monetary Authority of Singapore’s Project Guardian, the pilot shows how financial institutions can use the Swift network for the settlement of tokenized fund subscriptions and redemptions.
Traditional fund processes, particularly in the $63 trillion mutual fund industry, are often hampered by inefficiencies, manual interventions and settlement delays that lead to increased costs and reduced liquidity. This pilot aims to bridge the gap between digital assets and fiat-based systems across Swift’s extensive global network, streamlining processes for the payment leg without requiring a complete shift to onchain transactions.
Using Chainlink’s platform for token minting and burning alongside Swift’s infrastructure, financial institutions can now facilitate the tokenized fund lifecycle — from subscriptions to redemptions.
Chainlink has been working with Swift since 2023, and the pilot builds on previous collaborations aimed at enhancing liquidity and operational efficiency within the tokenized fund landscape.
MAS’s Project Guardian promotes asset tokenization to improve financial market functions, and this trial used existing Swift rails to circumvent the need for new onchain infrastructure.
Swift strategy head Jonathan Ehrenfeld noted the initiative aligns with Swift’s mission to provide secure, scalable options for financial institutions exploring digital asset classes and currencies. Sergey Nazarov, Chainlink’s co-founder, highlighted the significance of this off-chain payment capability, emphasizing its potential to increase capital flow and expand digital asset accessibility across TradFi institutions.
As the financial industry increasingly explores digital assets, these kinds of interoperable solutions pave the way for broader adoption and operational efficiency across global markets.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your morning with the top news and analysis to inform your day in crypto.
- Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
- 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
- Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
- The Drop: For crypto collectors and traders, covering apps, games, memes and more.
- Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
