Swift and Chainlink Complete Tokenization Pilot Project
Swift, UBS Asset Management, and Chainlink announced the completion of a pilot project integrating traditional payment systems with tokenized assets. This initiative is part of the Monetary Authority of Singapore’s Project Guardian.
The pilot demonstrates how financial institutions can utilize the Swift network for settling tokenized fund subscriptions and redemptions. The $63 trillion mutual fund industry faces inefficiencies, manual interventions, and settlement delays that increase costs and reduce liquidity. This project aims to connect digital assets with fiat-based systems using Swift's global network, improving the payment process without necessitating a complete transition to onchain transactions.
By leveraging Chainlink’s platform for token minting and burning in conjunction with Swift’s infrastructure, institutions can manage the entire tokenized fund lifecycle—from subscriptions to redemptions. Chainlink has collaborated with Swift since 2023, building on prior efforts to enhance liquidity and operational efficiency in the tokenized fund sector.
Project Guardian promotes asset tokenization to optimize financial market functions, utilizing existing Swift rails to avoid the need for new onchain infrastructure. Jonathan Ehrenfeld, Swift strategy head, stated that this initiative aligns with Swift’s mission to provide secure and scalable options for financial institutions exploring digital asset classes. Sergey Nazarov, Chainlink’s co-founder, emphasized the importance of off-chain payment capabilities in facilitating capital flow and increasing digital asset accessibility within traditional finance (TradFi) institutions.
This interoperable solution represents a significant step toward broader adoption and operational efficiency in the evolving financial landscape.