UBS offers Swiss retail and wealth clients the ability to make fractional gold investments through its UBS key4 gold product. It is managed using a permissioned blockchain, the UBS Gold Network, but now the bank wants to explore making the offering available outside of Switzerland. Hence, it ran a proof of concept (PoC) using ZKsync, the Ethereum layer 2 solution.
The aim was to explore the scalability, privacy and interoperability potential of ZKsync.“Whilst tokenized securities hold a lot of potential to bring new solutions to our clients, scalability, privacy, and interoperability remain key challenges to overcome,” said Christoph Puhr, Digital Assets Lead for UBS Group. “Our PoC with ZKsync demonstrated that Layer 2 networks and ZK technology hold the potential to resolve these.”
The news came from ZKsync, but we did not have direct confirmation from UBS by the time of publication. UBS has been working with Ethereum technologies for some time. A year ago it issued a tokenized warrant on the public Ethereum blockchain to Hong Kong exchange owner OSL. Near the end of the year it launched the UBS USD Money Market Investment Fund Token (uMint), also on Ethereum. The Singapore fund is only available via authorized distributors, starting with DigiFT.
Meanwhile, there have been many offerings of tokenized gold, both from the crypto community and institutions. While HSBC grabbed significant attention by making tokenized gold available to Hong Kong retail clients, organization’s such as Japan’s Mitsui were already making similar offerings. Additionally, blockchain is being used for various wholesale gold applications, including by Euroclear in a trial, and by the London Bullion Market.
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