UBS Tokenize

Tokenization brings the benefits of digitalization and blockchain technology to regulated financial assets. It has the potential to reimagine capital markets for issuers and investors.

As blockchain technology has evolved, UBS has developed UBS Tokenize as a full-service offer for digital asset services, opening the door to the world of decentralized finance to a broader range of market participants and bringing them closer together.

UBS Tokenize supports opportunities across origination, distribution, and custody, initially focusing on tokenization of bonds, funds, and structured products.

Innovative product framework

By taking regulated financial assets into the world of decentralized finance, we can provide tangible benefits across the full value chain. UBS Tokenize offers on-chain issuance capabilities, based on an innovative product framework and blockchain technology.

Blockchain and technology agnostic

Putting you in control and ensuring you are not dependent on a single technology framework. Being blockchain agnostic means UBS Tokenize’s open architecture seamlessly integrates to your existing systems and supports multiple Distributed Ledger Technology (DLT) networks.

Compliant and regulated products

As digital technologies potentially introduce new risks, ensuring regulatory compliance is key. The UBS Tokenize product framework ensures that any products you bring into the decentralized world are compliant with the relevant regulation and aligned with their intended purposes.

Institutional-grade offering

UBS’s deep-rooted position in financial markets means we’ve created a resilient and adaptable origination service to foster innovation. Equipped with best-in-class smart contract level governance, your products can access new audiences more efficiently while also benefiting from institutional-grade infrastructure and a wealth of expertise.

Issuers

Are you looking to expand the reach of your products and unlock opportunities for new audiences?

We offer:

The ability to take institutional-grade products to market through tokenized assets
Connectivity to an emerging investment community, creating additional opportunities to receive funding and fractionalize products to create greater accessibility
The option to leverage public and private blockchains based on your requirements, minimizing the need for investments in technical or development capabilities

Distributors

Do you sell funds, structured products, and other solutions to end investors?

We offer:

Regulated tokenization services underpinned by robust governance
Full transparency to ensure your compliance and security needs are met
The option to leverage the blockchains based on your needs with minimal integration requirements

Investors

Are you looking for new investment opportunities?

We offer:

Access to digital products such as regulated tokenized funds*, bonds, and structured products
An expanded universe of investments from multiple issuers accessible through a single digital channel
A secure and efficient service, backed by a robust and compliant set-up

*Currently in development

Data providers

Are you looking to extend the reach of your data sets to new audiences?

You can profit from:

Providing data by interacting with smart contracts to create new product opportunities
Sharing information quicker through a secure and seamless system
Direct communication with other market participants

UBS Tokenize puts you in control. Based on your digital strategy, you can utilize the full service or just parts of it.

We offer:

Extensive knowledge of the market to support the design, documentation, and tokenization of assets
Robust preparation of all documentation to meet industry standards and your own compliance and legal requirements

We offer:

Expert support to help initiate and issue assets on public and private blockchains
Flexibility to construct product frameworks specific to your business and operational requirements, minimizing dependence on external suppliers

You can benefit from:

Connection with new investor bases, benefiting from the network effects for selected internal and external distribution
Tokenization allows assets to be fractionalized into smaller tickets compared to traditional markets

You can benefit from:

Integrated custody / IT infrastructure
Selected third-party custodians when required

We understand our clients’ needs are evolving – and digital technology is key to creating more opportunities. UBS Tokenize supports you at every step, helping you to stay ahead of the game.

Innovative markets

Access new innovative markets

Our approach uses our wealth of knowledge and substantial expertise to support the creation and development of innovative strategies and products.

A resilient system

Automation

Greater efficiency

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Joint report developed by the Monetary Authority of Singapore’s Guardian Fixed Income Industry Group. The report was led by UBS AG, in collaboration with Global Financial Markets Association (GFMA) and International Capital Market Association (ICMA).

Fixed Income FrameworkNovember 2024

UBS in partnership with our global client base, has long been at the cutting edge of applying the power of blockchain technology and digital assets.

First tokenized investment fund – uMINT

Launch of first tokenized investment fund, a Money Market investment built on Ethereum distributed ledger technology.

First tokenized warrant

Launch of Hong Kong’s first-ever investment-grade tokenized warrant utilizing the on-chain issuance product framework offered by UBS Tokenize.

Launch and first tokenized structured note

UBS Tokenize went live with the first in production issuance of a tokenized structured note by Bank of China International. BOCI have continued to regularly issue using UBS Tokenize.

First tokenized VCC fund pilot

The first blockchain-native tokenized VCC fund pilot is launched in Singapore.

First cross-border repurchase transaction

UBS, SBI and DBS have launched the world’s first live repurchase transaction (repo) with a natively-issued digital bond leveraging UBS Tokenize. The transaction automatically and instantly settled a repo, digital bond purchase and redemption using regulated digital payment tokens, across regulated entities located in three different jurisdictions: Japan, Singapore, Switzerland.

Pilot project

USD 50 million tokenized fixed rate note sold to Asia Pacific clients through UBS Tokenize.

Conception of UBS Tokenize

Successfully completed extensive proof of concepts and initial transactions of FX and deposits using tokenization with our clients and external counterparts.

Expand all

What is a DLT blockchain?

Distributed ledger technology shares data between different computers or "nodes" which record data in a distributed and encrypted way.

A blockchain is a special type of a distributed ledger and structures data in so-called blocks and encrypts the data with modern cryptographical methods, before broadcasting the transactions to every node, which means every node on the network has an exact copy of the same data. A consensus mechanism is used to validate every piece of data that is entered and that every piece of data is unique.

A blockchain has 4 key features:

Data is, as with all distributed ledgers, stored across many computers (or nodes) with an identical copy of the data on every computer
Data is cryptographically secured
A consensus algorithm defines how participants in a blockchain come to an agreement on the state of the ledger (typical consensus protocols are proof of work and proof of stake)
Second generation blockchains added programmability features though smart contracts

Blockchains can also be configured to restrict which network participants can participate in consensus.

In a permissioned network, a central authority determines which parties are allowed to propose new blocks and to participate in finding consensus

In permissionless networks such as Bitcoin and Ethereum, there is no central power, and anyone is eligible to participate.

What are digital assets?

Digital assets are a digital representation of value on a distributed ledger. Almost any asset can be represented as a digital ‘token’, that can be all or part of the original asset. This can then be traded just as other traditional assets are bought and sold, with additional benefits of liquidity, efficiency, and security.

Transactions can be completed in near real time, rather than waiting for reconciliation – potentially transforming financial markets infrastructure.

Underlying digital assets is the technology known as blockchain. Blockchain allows information to be encoded, stored, and transferred securely in a digital environment. Data is not stored centrally but distributed across a network – it is sometimes referred to as a ‘distributed ledger’. This means information is not dependent on a single entity for security or functionality.

Cryptocurrencies are only a small part of this new universe. UBS has no active offering in crypto as this is still an emerging market segment and regulation across the globe still evolving and unclear.

What is tokenization?

Tokenization refers to assets that are created digitally and traded using blockchain technology. It consists of creating assets as digital tokens, allowing them to be issued, traded, and processed on blockchain networks.

All UBS Tokenized assets are created, originated, distributed, and held by regulated custodians. Tokenized assets provide participants with access to new marketplaces, faster settlement, and increased liquidity, and flexibility.

Digital asset transactions can be completed in near real time, representing a dramatic improvement in efficiency for many traditional asset classes that can take hours or days to reconcile. This makes for far more efficient markets, lowering costs and improving asset liquidity. Tokenization is also more flexible than traditional assets. Tokens can be issued as fractions of a larger asset. This can make asset classes with high minimum investments or low liquidity far more accessible to smaller investors, expanding the investable universe for these buyers and introducing issuers to new target markets.

How are products structured through UBS Tokenize?

How does a tokenized product benefit investors compared with traditional structures?

What are the key risks associated with interacting with tokenized assets?

Cryptographic tokens (or digital assets) based on the DLT are largely new and untested, and as such subject to known and unknown risks. These might include (but are not limited to) product risks, e.g., market, foreign exchange, credit, liquidity, or risks of using the Distributed Ledger Technology, e.g., legal, regulatory, compliance, operational failures, theft, fraud. In addition to the risks mentioned, there are other risks associated with the acquisition, storage, transfer and use of the digital token by potential investors, including risks that the participants may not be able to anticipate. Such risks may further materialize as unanticipated variations or combinations of the risks set out herein.

Why issue securities on a public blockchain?

The use of a public blockchain, as opposed to a permissioned private blockchain, can provide greater interoperability and connectivity across different market participants. This can provide users with access to more potential customers and service providers, improved opportunities to execute at the best price, and other operational efficiencies such as faster transaction times. However, there are cases when it is more favourable to use private permissioned blockchain and we recommend performing extensive due diligence on the outcomes you are trying to achieve before engaging with public or private blockchains.

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Innovative product framework

Blockchain and technology agnostic

Compliant and regulated products

Institutional-grade offering

Issuers

Distributors

Investors

Data providers

Origination

Tokenization and Issuance

Distribution