Chainlink, a leading blockchain oracle provider, has joined forces with UBS, a global asset manager overseeing $5.9 trillion in assets, and DigiFT, a specialist exchange in tokenized assets, to initiate a pilot project aimed at automating real-world tokenized funds (RWA) in Hong Kong.
This innovative pilot focuses on deploying blockchain infrastructure to streamline and automate the distribution, settlement, and lifecycle management of tokenized financial products. By harnessing blockchain technology, the initiative aims to reduce manual errors and increase operational efficiency within fund management.
The pilot forms part of Hong Kong’s Cyberport Blockchain & Digital Asset Pilot Subsidy Scheme—an experimental sandbox facilitating the testing of novel cryptocurrency and blockchain solutions for future regulatory approval and market adoption.
In practice, investors submit subscription or redemption requests for UBS’s tokenized funds via DigiFT’s smart contracts. Chainlink’s Digital Transfer Agent contracts then verify and process these orders on-chain, ensuring transparency and accuracy. Subsequently, the processed instructions trigger fund-related events, such as issuance and redemption, compliant with the Swiss-developed Capital Markets Technology Association (CMTA) Token standards.
Beyond this pilot, Cyberport is also exploring various other blockchain innovations, including decentralized identity solutions, stablecoins, payment systems, and platforms for social innovation and enhanced digital experiences.
Unlike mainland China, which maintains stricter digital asset regulations, Hong Kong offers clearer regulatory frameworks for digital assets. However, Hong Kong still operates under China’s overarching policies, including upcoming restrictions on crypto activities by Chinese companies within the administrative region.
DigiFT plays a crucial role by providing compliance feedback, helping ensure the implemented solutions meet the financial and interoperability standards expected by Hong Kong’s financial institutions.
Artisanal processes like manual reconciliation in traditional fund management can lead to errors and discrepancies between fund value and underlying assets. The integration of automation through RWA tokenization may help mitigate these risks.
Emerging automation trends in RWA tokenized funds include integrating decentralized finance technologies and incorporating yield-generating mechanisms. Automating fund management not only enhances efficiency but can also reduce costs and thereby boost revenues or investor returns.
Further Reading: The $400 trillion traditional finance market offers vast potential for tokenized RWAs, says Animoca
RWA Tokenization Gains Traction in 2025
The real-world asset tokenization market witnessed significant momentum in 2025. Institutional players and crypto exchanges alike are embracing tokenized alternatives underpinned by tangible assets.
For instance, tokenized institutional alternative funds surged 47% to reach $1.74 billion during a recent 30-day period ending in late August. Meanwhile, the overall market capitalization for real-world asset tokens has trended upwards this year, with CoinGecko reporting a total market cap of $66 billion at the time of writing, marking a 1.8% increase over the past 24 hours.
Cross-industry collaborations are strengthening this trend. Traditional financial institutions like BlackRock and Franklin Templeton have launched funds backed by US Treasury securities. Simultaneously, crypto exchanges such as Kraken and Bybit have ventured into offering tokenized stocks, further bridging the gap between traditional and digital finance.
Magazine Feature: Exploring whether platforms like Robinhood or Kraken can achieve truly decentralized tokenized stock offerings
