Chainlink, Swift & UBS Pilot Tokenized Fund Solution

The newly developed system enables banks and asset managers to process tokenized fund subscriptions and redemptions through the same Swift messaging infrastructure they already utilize daily. According to the September 30 announcement, this solution addresses a critical technical barrier that has slowed digital asset adoption across the massive global fund industry. By leveraging Swift’s established ISO 20022 format, institutions can now route messages through Chainlink’s Runtime Environment (CRE), which then triggers on-chain smart contract actions using Chainlink’s Digital Transfer Agent standard.

This integration represents a practical bridge between traditional financial messaging systems and blockchain technology. The “plug-and-play” model allows financial institutions to experiment with tokenized funds without facing the prohibitive costs and complexity of building entirely new systems from scratch. For UBS Tokenize, the bank’s dedicated tokenization unit, this meant successfully processing fund subscription and redemption requests while maintaining their existing operational framework.

The current initiative builds directly upon Chainlink, Swift, and UBS’s earlier collaboration in the Monetary Authority of Singapore’s Project Guardian in 2024, which tested tokenized asset settlement using off-chain cash. This continuity demonstrates a deliberate, phased approach to integrating blockchain technology into mainstream finance. The progression from testing tokenized asset settlement to now processing fund subscriptions and redemptions shows meaningful advancement in the practical application of blockchain solutions.

Chainlink co-founder Sergey Nazarov emphasized that the collaboration demonstrates how smart contracts and new technical standards can bring greater efficiency to the entire asset lifecycle. Meanwhile, UBS is showcasing how established financial institutions can utilize tokenization not just as a theoretical concept, but as a practical tool to enhance existing products and explore new distribution models. The successful pilot with UBS Tokenize provides concrete evidence that traditional banks can adapt to blockchain technology while maintaining their core operational structures.

The ability to manage tokenized workflows directly from legacy infrastructure could prove transformative for the global asset management sector, which faces increasing pressure to modernize operations and reduce costs. According to Chainlink’s analysis, using Swift to trigger on-chain events significantly reduces reconciliation work, enhances compliance automation, and increases transparency across fund operations. These improvements address persistent pain points in an industry managing trillions of dollars in assets.

Tokenization of funds has become a strategic focus for both financial institutions and regulators as firms seek ways to enhance settlement speed, mitigate operational risk, and unlock new forms of market flexibility. The Chainlink-Swift integration represents a crucial advancement that could help move tokenization from isolated pilot programs to broader adoption across global capital markets. By maintaining the familiar Swift infrastructure while gaining blockchain benefits, institutions can transition gradually rather than undergoing disruptive system replacements.

The implications extend beyond technical efficiency to strategic positioning in an evolving financial landscape. As UBS demonstrates through its tokenization unit, established financial institutions can leverage these technologies to enhance their competitive positioning while exploring new revenue streams and distribution channels. The successful pilot suggests that the gap between traditional finance and blockchain technology may be narrowing faster than many industry observers anticipated.