Switzerland’s Biggest Bank, UBS, Pioneers Tokenized Fund on Ethereum

The Union Bank of Switzerland (UBS) has launched a tokenized money market fund on the Ethereum blockchain. This new fund is called the “UBS USD Money Market Investment Fund Token” or “uMINT.”

By launching uMINT, UBS is making a big step toward merging traditional finance with blockchain technology. The bank aims to meet the growing demand for tokenized assets from both large institutions and individual investors. UBS’s choice to use Ethereum shows how financial companies are starting to accept and work with decentralized finance (DeFi) tools and blockchain technology.

The recent launch follows a successful pilot test conducted by UBS in 2023 through its tokenization platform, UBS Tokenize. The pilot demonstrated the viability of Ethereum-based smart contracts for managing fund subscriptions, redemptions, and other fund-related activities. 

Crypto Analysts and Experts Bullish on Ethereum’s Role in Traditional Finance

The UBS tokenized fund launch has sparked excitement among crypto enthusiasts. Mario Nawfal, a popular crypto analyst, described it as putting “ETH right into the heart of traditional finance.” He shared on his X social account that major banks adopting tokenized assets could pave the way for Ethereum’s mainstream acceptance. Other analysts, like Tony Edward, agreed, emphasizing Ethereum’s growing role in the future of finance. Edward also suggested that investors may see long-term gains by holding Ethereum.

UBS LAUNCHED FIRST-EVER ETH-BASED FUND

Switzerland’s biggest bank, UBS, just levelled up with an Ethereum-based tokenized fund – the first of its kind.

This move is like putting ETH right into the heart of traditional finance.

If big banks are ready to play, it’s only a… pic.twitter.com/ZX6wztWdp8

— Mario Nawfal’s Roundtable (@RoundtableSpace) November 1, 2024

At the time of this announcement, Ethereum was trading at $2,515, reflecting strong interest in UBS’s move. This launch is one of several similar moves by large banks, adding credibility to Ethereum’s position as a leading platform for DeFi applications.

Growing Trend of Financial Institutions Embracing Blockchain Networks

UBS is part of a growing trend of financial firms using blockchain networks to make finance more efficient. For example, Franklin Templeton launched a tokenized fund on October 31, hosted on Base, a layer-2 network by Coinbase. This fund, the Franklin OnChain US Government Money Fund (FOBXX), initially launched on other blockchains like Stellar and Polygon, showing its flexibility across platforms.

New chain unlocked. Benji, our proprietary blockchain-integrated recordkeeping system, is now live on @base! With this announcement, Franklin Templeton is the first asset manager to build a tokenized fund on Base.

Base is a layer 2 blockchain built on Ethereum designed to… pic.twitter.com/lRij7HchSl

— Franklin Templeton Digital Assets (@FTDA_US) October 31, 2024

Just before FOBXX, Libeara and FundBridge Capital introduced a tokenized U.S. Treasuries fund, allowing investors gain access to some stable assets on the blockchain. Also, earlier in the year, BlackRock released its USD Institutional Digital Liquidity Fund, which quickly became the largest treasury fund tokenized on a blockchain.

These launches show how conventional financial institutions are getting comfortable with blockchain, particularly Ethereum, for offering secure, decentralized financial services. As major firms like UBS, Franklin Templeton, and BlackRock move into this space, blockchain finance is becoming more mainstream, with Ethereum leading the way in this transformation.