Blockchain-Based Fractional Gold Investments Are Introduced by UBS
Through its UBS key4 gold product, UBS, a prominent Swiss bank, allows its retail and wealth clients to invest in fractional gold. The UBS Gold Network is a permissioned blockchain that powers this service. UBS has used ZKsync, an Ethereum Layer 2 scaling solution, to carry out a proof of concept (PoC) in an effort to expand its digital gold service outside of Switzerland.
Examining Interoperability, Scalability, and Privacy
This Proof of Concept’s main goal was to assess how ZKsync might improve digital gold transactions’ scalability, privacy, and interoperability.
Christoph Puhr, UBS Group’s Digital Assets Lead, said, “Tokenized securities offer immense potential for client solutions, but challenges like scalability, privacy, and interoperability must be addressed.” “Our proof of concept with ZKsync showed that zero-knowledge (ZK) technology and Layer 2 networks can offer workable solutions.”
The Ongoing Use of Ethereum-Based Solutions by UBS
At the time of publication, UBS had not verified the specifics of the experiment, despite ZKsync’s announcement. But for a while now, UBS has been using Ethereum technology. In partnership with Hong Kong’s OSL exchange, the bank published a tokenized warrant on the public Ethereum blockchain a year ago. Later on, it unveiled the Ethereum-based UBS USD Money Market Investment Fund Token (uMint), which is accessible in Singapore through approved distributors like DigiFT.
Growing Interest in Tokenized Gold Among Institutions
The idea of tokenized gold has become popular among financial institutions and the cryptocurrency community. When HSBC started selling tokenized gold to retail customers in Hong Kong, it attracted a lot of attention. Other groups, like Japan’s Mitsui, have previously been involved in this field, though. Additionally, the London Bullion Market is investigating similar applications, and Euroclear is undertaking trials of blockchain technology for wholesale gold transactions.
Blockchain’s place in contemporary financial solutions is further cemented by UBS’s most recent effort, which highlights the bank’s dedication to innovation in digital assets.
