Digital Assets

UBS Asset Management Takes Lead in Tokenised VCC Fund Pilot in Singapore

UBS Asset Management (UBS AM) has marked a significant milestone by launching the inaugural pilot of a tokenised Variable Capital Company (VCC) fund. This pioneering move is part of a broader industry initiative led by the Monetary Authority of Singapore (MAS), aimed at exploring the potential of digital assets in the investment fund landscape.

The VCC, a well-established corporate structure for investment funds in Singapore, is at the center of this groundbreaking initiative. Thomas Kaegi, Singapore and Southeast Asia head of UBS Asset Management, highlighted the importance of this venture, stating, "This is a key milestone in understanding the tokenisation of funds." The initiative seeks to leverage the expertise of both traditional financial institutions and fintech providers to enhance market liquidity and improve market access for clients.

UBS AM's pilot program delves into the native issuance of VCC funds on digital asset networks, aligning with the objectives set forth in MAS's Project Guardian initiative, which was introduced in May 2022. The overarching goal of Project Guardian is to streamline fund distribution and facilitate more efficient secondary market trading of VCC fund shares, ultimately driving industry-wide operational efficiencies, as outlined by MAS.

This strategic move by UBS Asset Management reflects a growing trend in the financial industry, where traditional investment structures are being reimagined and adapted to leverage the potential of blockchain and digital assets. The successful implementation of this pilot could pave the way for transformative changes in the way investment funds operate and provide investors with enhanced opportunities in the digital era.