Switzerland’s Banking Giant USB Launches Its First Tokenized Fund on Ethereum

USB, Switzerland’s largest bank, has launched a maiden tokenized investment fund on the Ethereum network, its first tokenized product on the network.

The banking giant, which manages assets worth $5.7 trillion, achieved a notable milestone after launching the asset. Named the USB USD Money Market Investment Fund Token (uMINT), the investment tool bridges the gap between traditional finance and digital technology.

uMINT holders would have exclusive access to USB’s institutional-level cash management solutions. The Ethereum-based digital token allows users to invest in the Switzerland-based bank’s money market instruments, which are characterized by a conservative, risk-averse framework.

USB Forays into Asset Tokenization

The leading bank’s recent launch is part of its global distributed ledger technology strategy. USB’s asset management arm aims to leverage public and private blockchains with smart contract capabilities to enhance fund issuance and distribution.

Switzerland’s largest bank has been exploring blockchain technology as early as 2023 through its in-house provider, USB Tokenize. This facilitated USB Asset Management’s launch of its live pilot of a tokenized Variable Capital Company (VCC) fund on Ethereum the same year.

Meanwhile, USB Asset Management has conducted other notable blockchain-based transactions. For instance, using its natively-issued digital bond, it executed the world’s first cross-border repurchase transaction on a public blockchain.

Asset Tokenization Surging in TradFi

Traction towards real-world asset (RWA) tokenization has recently surged as traditional financial institutions leverage the technology to enhance their market presence. Leading asset managers like BlackRock and Franklin Templeton have indicated interest in the emerging trend.

For context, Franklin Templeton recently expanded trading its OnChain US Government Money Market Funds, FOBXX, to Coinbase’s layer 2 scaling solution, Base. The fund now trades on six blockchains, including Avalanche and Arbitrum. In March, BlackRock launched BUIDL, a tokenized fund on Ethereum, in March.

Notably, chains like XRPL and Cardano have also seen their fair share of asset tokenization. For instance, the XRP Ledger became the choice network in a $1 billion tokenization collaboration between Zoniqx and Aurum Equity Partners late last month.

Cardano’s EMURGO also brought tokenized gold to the blockchain through a partnership with Kinka Gold to launch XNK. The Cardano network also attracted German-based tokenization platform Finest to launch tokenized gold on the blockchain.