In an innovative pilot, UBS Asset Management is utilising a new synergy between Chainlink 
$13 and Swift to trial blockchain-based fund transactions. This collaboration has been established without necessitating changes to the existing banking infrastructure, offering a glimpse into the potential evolution of financial systems. By integrating Chainlink’s technology with Swift’s ISO 20022 messaging system, banks are now equipped to initiate blockchain activities using familiar processes. This marks a significant step towards simplifying the adoption of blockchain in the financial sector, setting the stage for more streamlined operations.
What Does This Integration Mean?
This combined effort is part of Singapore’s Project Guardian, an initiative led by the Monetary Authority of Singapore to explore tokenisation in finance. Through this pilot, UBS Tokenize has successfully carried out fund subscriptions and redemptions by sending ISO 20022 messages via Swift, which are then converted into blockchain transactions through Chainlink. This method removes the need for the traditionally lengthy and intricate chain of intermediaries, allowing transactions to be processed more efficiently.
Could This Ease Blockchain Adoption?
Chainlink describes the integration as a “plug-and-play” model designed to connect older financial systems with new blockchain environments. This approach aims to simplify the technology transition for institutions and is seen as a way to foster global asset management improvements, a sector with an estimated value exceeding US$100 trillion. By reducing the requirement for new infrastructure, the solution represents a pragmatic step towards broader blockchain adoption.
One significant advantage underscored by Chainlink is the interoperability that decreases friction and augments automation for banks eager to modernise. Sergey Nazarov, the co-founder of Chainlink, noted:
“This initiative demonstrates the efficiencies that smart contracts and evolving technical standards can bring across the asset management lifecycle.”
This highlights a tangible benefit for financial entities looking to evolve their operational frameworks.
UBS’s involvement in the pilot highlights the financial sector’s growing interest in tokenisation to expedite settlement times and enhance cost-efficiency. UBS Tokenize’s active role points to the potential for existing financial frameworks like Swift to function as intermediaries between traditional and blockchain-based systems. As observed, such strategic collaborations may pave the way for future advancements in financial transaction methodologies.
Looking forward, the collaboration between Chainlink, UBS, and Swift showcases a potential pathway for legacy systems to seamlessly collaborate with blockchain technology. As the financial industry seeks out methods to boost efficiency and streamline operations, such integrations illustrate the feasibility of incorporating blockchain solutions without necessitating large-scale infrastructural changes. This could potentially influence other financial institutions to adopt similar approaches, making the transition to blockchain technology less daunting and more accessible.
