Chainlink Enables Institutions to Automate Tokenized Funds with Swift Integration

Chainlink has introduced a technical solution enabling financial institutions to manage tokenized investment fund subscriptions and redemptions via Swift messaging, a cornerstone of traditional finance. The integration leverages Chainlink's Runtime Environment (CRE) to process transactions using ISO 20022 messages, the global standard for financial communications. This allows banks to access blockchain infrastructure without overhauling existing systems, streamlining workflows for the $100+ trillion global fund industryChainlink, UBS Advance $100T Fund Industry Tokenization via Swift Workflow^[1]. In a pilot with UBS, CRE received Swift messages directly from UBS's systems, triggering on-chain actions in the Chainlink Digital Transfer Agent (DTA) to automate fund token minting and burningChainlink Advances Tokenized Fund Workflows With Swift Messaging in Collaboration With UBS^[2]. The solution eliminates the need for institutions to adopt new identity management systems, reducing operational friction and enabling seamless interoperability between legacy and blockchain infrastructuresChainlink integrates Swift messaging to streamline tokenized fund workflows with UBS^[3].

The pilot builds on prior collaboration with Singapore's Monetary Authority of Singapore (MAS) under Project Guardian, a 2024 initiative demonstrating tokenized fund settlement via off-chain cash payments using Swift. This latest development expands the concept by abstracting blockchain complexities, allowing institutions to trigger on-chain events through familiar Swift protocolsSwift, UBS Asset Management, and Chainlink successfully complete innovative pilot^[4]. The integration addresses inefficiencies in traditional fund management, such as manual interventions and delayed settlements, by automating processes like compliance checks and reconciliation. Chainlink CEO Sergey Nazarov emphasized the innovation's potential to unlock "product lifecycle composability" for institutions, enabling them to explore new financial instruments via smart contractsChainlink, UBS Advance $100T Fund Industry Tokenization via Swift Workflow^[5].

The initiative aligns with broader efforts to digitize asset management. A separate Chainlink pilot involving 24 global banks and infrastructure providers like DTCC and Euroclear used AI and CRE to standardize corporate action data, a process costing the industry an estimated $58 billion annuallyChainlink partners with UBS, DigiFT to automate tokenized fund operations^[6]. By automating data extraction and formatting into ISO 20022 records, the project aims to reduce operational costs and enhance transparency. Meanwhile, Swift's parallel blockchain-based ledger for cross-border payments, supported by over 30 banks, underscores the industry's shift toward interoperable on-chain infrastructureTokenized Funds Go Atomic With Chainlink, UBS^[7].

The solution's technical framework ensures security and scalability. CRE acts as a bridge, translating Swift messages into on-chain actions while maintaining compliance with regulatory standards. This approach reduces counterparty risk by enabling atomic settlements-where fund tokens and cash payments are processed in a single transaction-preventing partial failuresChainlink RWA Expands Tokenized Finance with UBS and DigiFT^[8]. For UBS, the pilot demonstrates how tokenized funds can operate in real-time, 24/7, with reduced liquidity gaps. The use of Chainlink's Digital Transfer Agent also eliminates manual reconciliation, a key pain point in traditional fund managementChainlink, UBS Advance $100T Fund Industry Tokenization via Swift Workflow^[9].

Analysts note that the integration could accelerate tokenized asset adoption by addressing institutional hesitancy around infrastructure complexity. By leveraging existing Swift systems, institutions avoid the costs of replacing legacy tools, while blockchain benefits like programmability and transparency are retainedChainlink integrates Swift messaging to streamline tokenized fund workflows with UBS^[10]. The collaboration between Chainlink, UBS, and Swift highlights a broader trend of interoperability between traditional and decentralized finance, with regulators in Singapore and Europe already exploring similar frameworks. As tokenized fund markets expand, the ability to trigger on-chain events via established messaging systems may become a standard practice, further blurring the lines between conventional and digital asset ecosystemsChainlink RWA Expands Tokenized Finance with UBS and DigiFT^[11].