Ethereum News Update: ISO 20022 Connects Blockchain with Banking Sector, Unlocking $100 Trillion Market

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Ethereum News Update: ISO 20022 Connects Blockchain with Banking Sector, Unlocking $100 Trillion Market

Bitget-RWA2025/11/04 11:12

By:Bitget-RWA

- UBS and Chainlink executed first onchain tokenized fund redemption using ISO 20022 standards, bridging blockchain and traditional finance. - The pilot with Swift enabled standardized subscriptions/redemptions, streamlining RWA settlements without custom integrations. - Tokenized U.S. Treasuries now value $8.6B, with institutions like BlackRock and Deribit adopting them as collateral despite liquidity challenges. - Ethereum dominates 75% of tokenized RWAs and 60% of stablecoins, with Standard Chartered pr

UBS and

Chainlink

have completed the first onchain redemption of a tokenized fund in a market projected to hit $100 trillion, representing a significant leap in merging blockchain with conventional finance. This achievement, realized through a pilot utilizing ISO 20022 messaging protocols, showcases how banks and blockchain platforms can work together to simplify settlement for real-world assets (RWAs). This progress comes amid a rapid rise in tokenized U.S. Treasuries, which now boast a $8.6 billion market cap, as reported by

Cointelegraph research

Ethereum News Update: ISO 20022 Connects Blockchain with Banking Sector, Unlocking $100 Trillion Market image 0

This pilot, run in partnership with Swift and

UBS

Tokenize, enabled both subscriptions and redemptions for a tokenized fund using the standardized ISO 20022 message format, which is widely used in traditional securities and payment settlements. By using this method, there is no need for custom system integrations, allowing custodians and fund managers to handle tokenized assets within their current processes. "The experiment showed that the same messaging banks rely on today can now activate smart contracts on blockchain," Cointelegraph reported, highlighting a move toward greater interoperability.

Tokenized money-market funds (MMFs), which invest pooled cash into short-term U.S. government debt, are increasingly being used as collateral in trading, lending, and repo markets. BlackRock’s BUIDL, the largest tokenized MMF, currently manages $2.85 billion, followed by Circle’s USYC and Franklin Templeton’s BENJI, holding $866 million and $865 million, respectively. Institutional uptake is on the rise, with exchanges such as Deribit and Bybit accepting tokenized Treasuries as collateral, and DBS Bank in Singapore piloting tokenized funds for repo deals.

Although the sector is expanding, obstacles remain. Regulatory rules restrict most tokenized funds to Qualified Purchasers, keeping retail investors out, while limited liquidity and set redemption periods reflect traditional fund structures. Additionally, exchanges often apply discounts to tokenized assets due to their lower liquidity compared to standard Treasuries. For instance, Deribit reduces margin requirements by 10% for tokenized collateral.

The outlook for the sector is optimistic.

Standard Chartered estimates

the tokenization industry could grow to $2 trillion by 2028, with

Ethereum

leading the way thanks to its robust infrastructure and dependability. The bank identified tokenized MMFs and listed stocks as major growth drivers, each expected to account for $750 billion of the total. At the same time, Ethereum’s role is highlighted by its hosting of 75% of tokenized RWAs and 60% of global stablecoins, cementing its position as the foundation of this transformation.

There is ongoing debate about Ethereum’s architecture, with

Vitalik Buterin

advocating for the removal of a feature he believes is incompatible with zero-knowledge proofs, reflecting continued discussion about the network’s future path.

Tokenized Treasuries surpass $8.6B as banks and exchanges expand collateral applications

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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