KEY FACTS: Chainlink, UBS Asset Management, and DigiFT are collaborating to automate the tokenization of real-world assets (RWAs) under the Cyberport Blockchain & Digital Asset Pilot Subsidy Scheme. The integration of Chainlink’s Digital Transfer Agent contracts, UBS’s tokenized fund expertise, and DigiFT’s regulated exchange platform, helps to streamline investor subscriptions, redemptions, and fund lifecycle management on the blockchain, adhering to CMTA Token standards. This initiative aims to eliminate manual errors, reduce costs, and enhance transparency, leveraging Hong Kong’s progressive regulatory environment for efficient, compliant tokenized fund operations.
Source: Chainlink, UBS, DigiFT
Chainlink, UBS, and DigiFT Launch Innovative Pilot in Hong Kong for Automated Tokenization of Real-World Assets
Chainlink, the leading decentralized oracle network, has joined forces with global financial powerhouse UBS Asset Management and Singapore-based tokenized asset exchange DigiFT. The collaboration aims to pioneer an automated system for tokenizing real-world assets (RWAs), potentially transforming how funds are managed, distributed, and settled in the digital age. This pilot project, focused on streamlining tokenized fund operations, could mark a new era for efficiency in Hong Kong's burgeoning digital asset ecosystem.
The initiative, announced this week, seeks to eliminate the pitfalls of manual processes that have long plagued the financial industry. The partners are leveraging blockchain infrastructure to automate key stages of fund lifecycle management, from investor subscriptions and redemptions to issuance and settlement. This could drastically reduce human errors, such as discrepancies in tracking fund values against underlying assets, and pave the way for more transparent and cost-effective investment products.
Hong Kong, a global financial hub and special administrative region of China, has positioned itself as a frontrunner in cryptocurrency innovation despite the mainland's stringent regulations. The pilot is being conducted under the auspices of the Cyberport Blockchain & Digital Asset Pilot Subsidy Scheme, a government-backed sandbox program designed to test and refine blockchain applications for real-world deployment. This scheme provides a controlled environment for experimenting with cutting-edge technologies, ensuring they align with local regulatory standards before scaling up.
At the heart of this project is a sophisticated workflow that integrates smart contracts and oracle technology to create a fully automated pipeline for tokenized funds. Investors begin by submitting subscription or redemption requests for UBS's tokenized products directly through DigiFT's platform. These requests are then routed to Chainlink's innovative Digital Transfer Agent (DTA) contracts, which serve as a robust infrastructure layer.
Chainlink's DTAs play a pivotal role by verifying the authenticity of these orders and recording them immutably on the blockchain. This on-chain verification ensures that all transactions are tamper-proof and instantly auditable, addressing common issues like manual reconciliation errors that can lead to costly adjustments. Once validated, the system triggers corresponding actions on UBS's tokenized product contracts, such as issuing new tokens or processing redemptions.
A key highlight of the technical setup is its adherence to the Capital Markets Technology Association (CMTA) Token standards. Developed in Switzerland, these standards provide a harmonized framework for issuing digital securities, promoting interoperability across different blockchain networks and financial institutions. This compliance-focused approach not only enhances security but also facilitates seamless integration with existing traditional finance systems.
DigiFT, known for its expertise in tokenized real estate and private equity, is contributing by evaluating the pilot's technological implementation against Hong Kong's stringent compliance and interoperability requirements. As a regulated exchange specializing in digital assets, DigiFT ensures that the solution meets the needs of local financial players, from banks to asset managers.
UBS, managing over $5.9 trillion in assets worldwide, brings its deep expertise in fund management to the table. The Swiss banking giant has been at the forefront of exploring tokenization, viewing it as a way to unlock liquidity in illiquid assets like real estate and private markets. UBS is partnering with Chainlink and DigiFT to demonstrate how automation can minimize operational risks and enhance investor confidence in digital funds.
Chainlink, renowned for its oracle services that connect smart contracts to real-world data, shows the importance of reliable infrastructure in this pilot. According to a Chainlink representative, these Digital Transfer Agent contracts are designed to automate complex financial processes while maintaining the highest standards of security and compliance. This technology has already been deployed in various DeFi applications, but its application to regulated tokenized funds in Hong Kong could set a global precedent.
Hong Kong's Cyberport initiative, launched to foster blockchain adoption, has become a hotbed for experimentation. Beyond this UBS-led pilot, the scheme is exploring a diverse array of crypto applications, including decentralized identity solutions for secure user verification, innovative payment systems and stablecoins to facilitate cross-border transactions, and blockchain-driven social innovations like digital experiences in gaming and NFTs. These efforts reflect Hong Kong's ambition to become Asia's premier destination for Web3 development.
What sets Hong Kong apart from mainland China is its progressive regulatory framework for digital assets. The Securities and Futures Commission (SFC) has issued clear guidelines for virtual asset trading platforms and tokenized securities, allowing licensed entities to operate within defined boundaries. This clarity has attracted international players like UBS and Chainlink, who see the region as a testing ground for scalable solutions.
However, the territory is not entirely insulated from Beijing's influence. Recent reports indicate upcoming crypto restrictions targeting Chinese companies operating in Hong Kong, which could impact cross-border activities. Despite these challenges, the pilot's focus on regulated infrastructure positions it well to navigate such hurdles, potentially influencing policy as it progresses.
The push toward automation in RWA tokenization addresses longstanding inefficiencies in fund administration. Manual processes often result in tracking errors, where the reported value of a fund diverges from its underlying assets, leading to reconciliation headaches and potential losses. The automation distribution, settlement, and lifecycle events, shows how the pilot could slash operational costs—benefits that might translate to higher revenues for fund operators or lower fees for investors.
Moreover, automation opens doors to advanced features like integrations with decentralized finance (DeFi) protocols, enabling yield generation through lending or staking tokenized assets. This could democratize access to high-yield opportunities traditionally reserved for institutional players, fostering greater inclusivity in global finance.
The timing of this pilot is significant as RWA tokenization surges in popularity. In 2025, institutional interest has skyrocketed, with traditional finance giants dipping into crypto and exchanges venturing into TradFi territories. For instance, over a 30-day period ending August 29, 2025, tokenized institutional alternative funds experienced a remarkable 47% increase, reaching $1.74 billion in value. The broader RWA tokenization market capitalization, encompassing protocols and tokenized assets, now stands at an impressive $66 billion, marking a 1.8% uptick in the last 24 hours alone, according to data from CoinGecko.
This growth is fueled by high-profile crossovers. BlackRock and Franklin Templeton have launched tokenized funds backed by U.S. Treasurys, offering stable yields on the blockchain. Meanwhile, crypto exchanges like Kraken and Bybit are tokenizing traditional stocks, allowing retail investors to trade equities 24/7 without intermediaries. These developments signal a maturing ecosystem where RWAs are no longer a niche experiment but a viable asset class.
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