Chainlink, UBS, and DigiFT Launch Tokenized Fund Pilot

UBS, Chainlink, and DigiFT launch blockchain pilot to automate tokenized fund operations and reshape Hong Kong’s financial infrastructure.

Chainlink, UBS, and DigiFT have started a new blockchain pilot project to automate the management of tokenized real-world assets (RWAs). This partnership is focused on improving the way that funds are issued, tracked, and settled with blockchain technology. If successful, the project could have an influence on the way tokenized assets are managed in Hong Kong, a key global financial center.

Tokenized Fund Pilot Aims to Cut Costs and Errors

The initiative is meant to help reduce manual errors and increase efficiency. UBS, with $5.9 trillion in assets, joins the leading oracle provider on blockchain, Chainlink, and DigiFT, a regulated digital asset platform, in this pilot study. Together, they are creating a regulated blockchain-based infrastructure for tokenized financial products.

Most tokenized assets are currently simply digital versions of traditional funds. However, this pilot goes beyond this. The partners want to automate each step in the fund lifecycle — from subscription to redemption — using smart contracts. This system is designed to save costs, reduce errors, and make fund management faster and more transparent.

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In the workflow, investors send orders for UBS’s tokenized funds via DigiFT’s smart contracts. These orders are settled through Chainlink’s Digital Transfer Agent (DTA) contracts. In addition, all transactions are recorded on the blockchain. Once orders are verified, smart contracts are used to trigger the issuance, redemption, or execution of other fund activities, all pursuant to CMTA Token Standards.

Henry Zhang, CEO of DigiFT, said the purpose is to link the regulated infrastructure and blockchain innovation. He said the project is in support of the concept of an open financial economy. According to Zhang, financial products should be able to operate across borders and platforms with ease, and this pilot is taking the industry in that direction.

DigiFT Secures SFC License as Tokenized Finance Expands

Fernando Vazquez, President of Capital Markets at Chainlink Labs, also offered his perspective: He explained that by connecting the systems of DigiFT and UBS with Chainlink’s DTA framework, the project is building a new model for how institutions disburse funds. He went on to state that this is a huge leap for compliant smart contract financial services in Hong Kong.

The project also reflects Hong Kong’s emerging role in the field of digital assets. DigiFT is licensed in both Singapore and Hong Kong, two of the most progressive financial jurisdictions in Asia. Recently, the Hong Kong Securities and Futures Commission (SFC) granted a license to DigiFT. As a result, the city further shows its support for regulated blockchain innovation.

One of those is Hong Kong’s CEO of DigiFT, Kevin Loo, who stressed how good the city’s potential was. He added that Hong Kong is becoming a hotbed for tokenized finance. The approval of the pilot project within the Blockchain & Digital Asset Pilot Subsidy Scheme proves this trend. Working with UBS and Chainlink, DigiFT hopes to develop tools that can meet institutional standards while helping the city to be a leader in digital finance.

Chainlink’s DTA framework also allows for seamless multi-blockchain connectivity, allowing the infrastructure to scale beyond Hong Kong.  DigiFT is now validating the system and providing feedback to ensure that it meets the compliance and operational needs of the region.

In summary, this collaboration is a great example of how blockchain can change the traditional financial landscape, particularly in the context of a regulated market such as Hong Kong.