Chainlink, UBS, and DigiFT Pilot Automated Tokenization Fund in Hong Kong
Blockchain oracle provider Chainlink, global asset manager UBS, and digital asset exchange DigiFT have launched a pilot program in Hong Kong aimed at automating the lifecycle management of tokenized funds. This initiative, part of Hong Kong's Cyberport Blockchain & Digital Asset Pilot Subsidy Scheme, seeks to streamline fund distribution, settlement, and management, potentially reducing manual errors and increasing efficiency in the burgeoning real-world asset (RWA) tokenization market.
Key Takeaways
- Chainlink, UBS, and DigiFT are collaborating on a pilot to automate tokenized fund operations in Hong Kong.
- The project aims to enhance efficiency and reduce errors in fund distribution, settlement, and lifecycle management.
- The initiative leverages Chainlink's Digital Transfer Agent and DigiFT's smart contracts, adhering to CMTA token standards.
- This pilot is supported by Hong Kong's Cyberport Blockchain & Digital Asset Pilot Subsidy Scheme.
Streamlining Fund Operations
The collaboration focuses on building a regulated, blockchain-based infrastructure to automate and simplify the processes involved in tokenized products. Currently, these operations often rely on manual paperwork, which can lead to delays and tracking errors. By shifting these functions to smart contracts, the project intends to cut costs and standardize operations.
The workflow involves investors submitting subscription or redemption requests for UBS's tokenized products via DigiFT's smart contracts. Chainlink's Digital Transfer Agent contracts then verify these orders and record them on-chain. This on-chain record triggers the corresponding issuance or redemption events on UBS's tokenized product contracts, which are designed to comply with the Capital Markets Technology Association (CMTA) Token standards.
Hong Kong's Digital Asset Landscape
This pilot is being conducted within Hong Kong's regulatory sandbox, designed to test new cryptocurrency ideas for potential future implementation. Unlike mainland China, Hong Kong has established a clear regulatory framework for digital assets, although it remains subject to certain Chinese regulations. DigiFT is providing crucial feedback on the technological implementation to ensure it meets the compliance and interoperability requirements of Hong Kong's financial institutions.
The Rise of RWA Tokenization
The automation of RWA tokenization funds is a growing trend, driven by integrations with decentralized finance (DeFi) and the potential for yield generation. Increased efficiency through automation can lead to lower costs, benefiting both fund operators and investors. The RWA tokenization market has seen significant momentum in 2025, with institutional players entering the crypto space and crypto exchanges exploring traditional finance. Tokenized institutional alternative funds have surged, and the overall market capitalization for RWA coins has reached billions of dollars, indicating strong institutional interest and adoption.