UBS Launches First Tokenized Money Market Fund
Asset manager UBS has announced the launch of its USD Money Market Investment Fund Token (uMINT), built on Ethereum. which is part of the broader expansion of UBS’s tokenization services through UBS Tokenize.
The uMINT fund represents UBS's commitment to bridging traditional finance with blockchain technology, allowing qualified investors access to a digital-first version of a money market fund. UBS is partnering with distribution networks authorized to onboard clients into the fund. The Ethereum-based structure facilitates real-time transparency, reduced transactional friction, and enhanced security, the firm said.
“We have seen growing investor appetite for tokenized financial assets across asset classes. Through leveraging our global capabilities and collaborating with peers and regulators, we can now provide clients with an innovative solution,” Thomas Kaegi, co-head of UBS Asset Management APAC, said in a statement.
Comprehensive Digital Asset Strategy
This move aligns with UBS's broader strategy to explore the potential of tokenization across various asset classes. The launch of uMINT is a notable addition to UBS Tokenize, the institution’s dedicated platform for tokenization services. UBS Tokenize has set its sights on digitizing various asset classes, focusing on bonds, structured notes, and fund offerings.
UBS has already made strides in the industry: in June 2023, it completed a fully digital structured note issuance in China, and in November 2023, it executed the world’s first cross-border repurchase agreement for a digital bond entirely settled on a public blockchain.
UBS has also been working closely with the Monetary Authority of Singapore (MAS) on Project Guardian, an initiative that seeks to build robust frameworks for asset tokenization, which has proven instrumental to this launch. In October 2023, UBS Asset Management initiated a pilot under the Variable Capital Company (VCC) structure, a flexible corporate entity for investment funds, signaling its commitment to structured regulatory experimentation.
This all comes amid the backdrop of intensifying competition among asset managers, with institutional money continuing to flow into the space. Rival firms like Franklin Templeton and BlackRock already have launched crypto-based financial products, FOBXX and BUIDL respectively, which have market caps of $408 million and $533 million respectively, according to data from rwa.xyz.
Record Quarter for Asia Wealth Unit
The fund launch also comes on the heels of strong earnings results for UBS in Asia, where the bank has rebounded after two consecutive quarters of declines. UBS Global Wealth Management saw assets under management (AUM) in the APAC region reach $678 billion in Q3 2024, driven by net new assets of $7.3 billion, according to the bank's financial results published last week.
This figure represents a marked increase from $627 billion in the previous quarter and $611 billion in Q3 2023. The region’s pre-tax profit surged by $154 million to $286 million, while total revenues grew by 13% to $919 million, supported by higher transaction-based, recurring net fee, and net interest income. The cost/income ratio also improved significantly, dropping from 84.2% to 69.4%, showcasing a leaner operational model.
Globally, UBS’s AUM rose 18% year-on-year to $4.3 trillion, although integration-related expenses and purchase price allocation adjustments led to an operating loss of $204 million.