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A groundbreaking development is underway in the crypto and finance sectors. Chainlink has launched a technical solution that enables banks to interact with tokenized investment funds via the Swift messaging system, which forms the backbone of traditional finance. The solution uses the Chainlink Runtime Environment (CRE) to process subscriptions and redemptions for tokenized funds, allowing institutions to access blockchain infrastructure using the tools they already employ.
The Convergence of Swift and Blockchain
In a pilot project conducted with UBS, the CRE system managed tokenized fund transactions via the ISO 20022 messaging standard used by Swift. Blockchain workflows were triggered directly from UBS’s existing systems upon receiving Swift messages, and subscriptions and payments were automatically processed through the Chainlink Digital Transfer Agent.
This approach allows banks to integrate blockchain technology while continuing to use familiar financial instruments. Chainlink’s infrastructure manages the remaining technical processes, providing a secure and efficient environment for institutional applications.
Pilot Program for the Trillion-Dollar Fund Industry
The pilot aims to test the advantages of blockchain technology for the $100 trillion global fund industry. The project builds on previous pilot initiatives, including the Project Guardian initiative led by the Monetary Authority of Singapore.
Chainlink’s solution increases interoperability by enabling institutions to use Swift to trigger on-chain events. Additionally, a separate pilot involving 24 global banks and financial infrastructure providers (such as DTCC and Euroclear) combines blockchain and AI to extract and standardize data from corporate action announcements.
Market and Industry Commentary
Experts state that this development marks a critical turning point for tokenized funds and digital asset products. The integration of Swift with blockchain simplifies institutional adoption of blockchain infrastructure and accelerates innovation within the sector.
The collaboration between Chainlink and UBS serves as a bridge between traditional finance and the blockchain world. Consequently, corporate action processes, which are estimated to cost $58 billion annually, become more efficient, transparent, and faster.
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