Chainlink, UBS, and DigiFT Collaborate on Automated Tokenization Pilot in Hong Kong
Chainlink, a leading blockchain oracle provider, has joined forces with UBS, the global asset manager overseeing $5.9 trillion, and DigiFT, a tokenized asset exchange, to launch a pilot project aimed at automating the management of real-world asset (RWA) tokenization funds. This initiative seeks to reduce manual errors and streamline fund operations through blockchain technology.
Project Overview and Regulatory Context
The pilot is conducted under Hong Kong’s Cyberport Blockchain & Digital Asset Pilot Subsidy Scheme, a regulatory sandbox designed to test innovative crypto applications for future deployment in the region. Unlike mainland China, Hong Kong maintains a defined regulatory framework for digital assets, although it remains subject to certain Chinese regulations, including anticipated restrictions on crypto activities by Chinese firms within the administrative zone.
Technical Workflow and Standards
Investors submit subscription or redemption requests for UBS’s tokenized products via DigiFT’s smart contracts. These instructions are then processed by Chainlink’s Digital Transfer Agent contracts, which verify and record the transactions on-chain. This infrastructure automates the distribution, settlement, and lifecycle management of tokenized securities, adhering to the Capital Markets Technology Association (CMTA) Token standards—a Swiss-developed framework for the harmonized issuance of digital securities.
Benefits and Industry Implications
Manual reconciliation in fund management often leads to tracking discrepancies or mismatches between fund value and underlying assets. Automation through blockchain promises increased operational efficiency, reduced costs, and enhanced compliance, potentially benefiting fund operators and investors alike. DigiFT contributes by assessing the technology’s compliance and interoperability with financial institutions in Hong Kong.
Growing Momentum in Real-World Asset Tokenization
Real-world asset tokenization has accelerated in 2025, driven by institutional adoption and the integration of traditional finance with crypto markets. Tokenized institutional alternative funds increased by 47% over a 30-day period ending August 29, reaching $1.74 billion. The broader market capitalization for RWA tokens stands at approximately $66 billion, reflecting steady growth. Major players such as BlackRock and Franklin Templeton have launched funds backed by US Treasuries, while crypto exchanges like Kraken and Bybit explore tokenized stocks.
This pilot project represents a significant step toward mainstream adoption of blockchain-based fund management within a regulated environment, potentially setting a precedent for similar initiatives in other jurisdictions.
FinOracleAI — Market View
The collaboration between Chainlink, UBS, and DigiFT to automate tokenized fund management in Hong Kong is a positive development for the RWA tokenization sector. By leveraging blockchain to reduce manual errors and streamline processes, the pilot could enhance operational efficiency and compliance, encouraging broader institutional participation.
Key risks include regulatory uncertainties related to Hong Kong’s evolving crypto policies and the technical challenges of integrating legacy financial systems with blockchain solutions. Market participants should monitor regulatory responses and pilot outcomes closely to assess scalability and adoption potential.
Impact: positive
