In a changing financial world, Ethereum, central banks and UBS are leveraging asset tokenization. We will convert real assets into digital tokens on the Ethereum crypto blockchain. This innovation has the potential to change the financial landscape.
BIS encourages crypto tokenization
“The rapid evolution of the global financial landscape, marked by the rise of cryptocurrencies and tokenization, must attract the attention of central banks around the world.” This was stated by Cecilia Skingsley at the New York FED Fintech Conference. This is the head of the Innovation Center of the Bank for International Settlements (BIS).
Aware of the inevitable advent of cryptocurrencies (including Ethereum), the BIS has focused for several years on researching the impacts of new technologies on the operations of central banks. Unlike other institutions, it takes a close interest in emerging technologies (including crypto currencies). She even goes so far as to share her findings with the global community.
“Crypto tokenization helps improve the efficiency and transparency of financial markets,” underlines the BIS in his “BIS Blueprint for the Future Monetary System” report.
Tokenization and cryptocurrencies: the challenges
The BIS report recognizes the potential of crypto tokenization as well as its positive impact on financial markets. However, she criticizes cryptocurrencies as a flawed system. According to the BIS, neither Ethereum nor any other crypto can completely replace traditional money.
Despite these criticisms, Cecilia Skingsley highlights the importance for central banks to prepare for a future where assets will be tokenized at scale. The real question, she says, is how the necessary infrastructure should be put in place to support this financial transformation.
UBS, pioneer of financial tokenization in Singapore thanks to Ethereum
UBS Asset Management positions itself at the forefront of financial innovation by launching its first pilot project of blockchain-native tokenized funds in Singapore. This initiative is part of the Guardian Project led by the Monetary Authority of Singapore (MAS). It reflects UBS’s desire to:
- understand the tokenization of funds,
- improve market liquidity.
Through its in-house tokenization service, UBS Tokenize, the company will begin a controlled pilot project of a tokenized monetary fund. The latter will be based on the Ethereum blockchain. This approach is part of UBS Asset Management’s overall technology strategy. It seeks to leverage public and private blockchains to improve the issuance and distribution of funds.
Ethereum crypto and tokenization thus open up new opportunities in global finance. To be continued…
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