The move by UBS Launches Tokenized fund on Ethereum is like “putting ETH right into the heart of traditional finance,” says one crypto commentator.

The Union Bank of Switzerland (UBS) has rolled out a tokenized fund on the Ethereum blockchain network after highlighting the increasing interest among investors for tokenized financial assets. 

In a Nov. 1 statement, the bank launched the money market fund built on the Ethereum network as the “UBS USD Money Market Investment Fund Token,” also known as the “uMINT.”

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UBS APAC co-head Thomas Kaegi explained that the firm has “seen a growing investor appetite for tokenized financial assets across asset classes.” 

Crypto commentators are bullish that the move will have a positive impact on Ether’s ETH$2,507.58 price.

Growing investor appetite for UBS Launches Tokenized financial assets

“This move is like putting ETH right into the heart of traditional finance,” popular crypto show Mario Nawfal’s Roundtable wrote in a Nov. 1 X post.

“If big banks are ready to play, it’s only a matter of time before tokenized assets go mainstream,” Mario Nawfal’s Roundtable added.

Meanwhile, crypto analyst Tony Edward commented on the news, saying, “If you don’t have some exposure to ETH, you’re going to miss out on gains.” At the time of publication, Ether is trading at $2,515, according to CoinMarketCap data.

UBS explained that token holders will be able to leverage its “institutional-grade cash management solutions,” which rely on high-quality money market instruments and are structured around a “conservative, risk-managed framework.”

It comes a year after the bank first tested a controlled pilot of the tokenized money market fund.

In October 2023, UBS launched the pilot through the bank’s in-house tokenization service called UBS Tokenize. Using a smart contract on Ethereum, the firm carried out various activities, including redemptions and fund subscriptions.

These digital tokens represent a share of the asset, enabling investors to buy, sell, or hold portions of traditional financial products more efficiently.

UBS aims to capitalize on the rising demand for tokenization by leveraging its global resources and regulatory collaborations. Investors who purchase tokens in the uMINT fund will gain access to institutional-level money market assets within a conservative, risk-managed framework.

Financial institutions flocking to blockchain networks

Meanwhile, a string of financial institutions have recently launched tokenized money funds on blockchain networks.

On Oct. 31, Cointelegraph reported that Franklin Templeton is launching its tokenized money fund on Base, Coinbase’s layer-2 network.

The Franklin OnChain US Government Money Fund (FOBXX) was the first tokenized fund to launch on Base.

Created in 2021, FOBXX has previously launched on blockchain networks, including Stellar, Polygon and Arbitrum.

Just a day before, on Oct. 30, Libeara, a blockchain asset tokenization platform, and FundBridge Capital, a fund management infrastructure, launched a tokenized United States Treasuries fund on a public blockchain for investors.

On May 1, BlackRock’s USD Institutional Digital Liquidity Fund became the largest treasury fund tokenized on a blockchain after surpassing Franklin Templeton’s product.

Since launching in mid-October, the project’s wallet has gathered over $14 million in crypto investments, but initial momentum quickly waned. 

Although the token sale began with high expectations, even experiencing a website crash on launch day, demand has since fallen. 

The WLFI token, designed as a governance token, currently holds little value for investors, as the protocol it is intended to govern is not yet operational. 

With no clear mechanism for the token to accrue value, the fundamentals of World Liberty Financial are causing concern among investors.