UBS Joins Tokenization Revolution With APAC Offering

The bank’s London branch last week announced that it closed its US$50 million tokenized debt securities offering for Asia-Pacific (APAC), High Net Worth Individuals (HNWIs), and family offices, which came in the form of digital fixed-rate security tokens.

The US dollar-denominated instruments carry a tenor of six months and are tokenized on a permissioned ethereum-based blockchain, UBS said, noting that the private placement marks the first time that uncertificated securities on a blockchain have been constituted under English and Swiss laws. They are among the first-ever global blockchain-based transactions involving multiple jurisdictions.

Typically, debt products rely on regular dividend payments but have long settlement times and manual processes that slow the issuance process. Tokenization allows debt issuers to alleviate these inefficiencies through automation.

UBS said deal has been “well received by its wealth management clients in Hong Kong and Singapore,” given the rising demand among Asian investors for fixed-income investments that can be transacted using blockchain.

“This transaction is the first step in an exciting journey in offering blockchain-based products to regional investors, and it underlines UBS’s ability to expand digital investment opportunities for our clients,” August Hatecke, co-head of UBS Global Wealth Management APAC, said in an announcement.

Seen as the next frontier in finance, tokenization aims to enable faster and more secure payments, digitize assets, and streamline access to financial services.

A recent report by KPMG and crypto asset management platform Aspen Digital noted that 58% of family offices and HNWIs in Hong Kong and Singapore are invested in digital assets, while Matrixport, which surveyed a similar demographic, said this week that mass affluent individuals were “moderately to highly interested” in digital assets after the downturn, looking to pick up digital assets at a lower price point amid the throes of crypto winter.

UBS said it intends to explore further transactions, including for third-party issuers, to maintain a growing pipeline of digital security deals.