Union Bank of Switzerland (UBS), the largest bank in Switzerland, has launched trials for a digital gold investment product on the Ethereum-based ZKsync layer-2, as shown in Figure 1. The purpose of this trial is to test gold trading operations using blockchain technology in order to enhance global functionality.
The product being tested, UBS Key4 Gold, enables users to trade gold units on-chain. It offers individual investors the opportunity to invest in fractional gold, while providing real-time pricing, deep liquidity, and secure physical storage options.
To achieve scalability, privacy, and interoperability, UBS utilized the ZKsync Validium solution under a proof of concept (PoC) framework. The UBS Key4 Gold operates on a permissioned blockchain infrastructure called the UBS Gold Network, which connects vaults, liquidity providers, and distributors, ensuring technical support for the product. This initiative is seen as a step towards digitizing the gold market.
Alex Gluchowski, one of the co-founders of ZKsync, expressed his belief in the future of blockchain technology for financial transactions. He stated, “This PoC reflects UBS’s efforts to develop financial products using blockchain technology. I believe that future financial transactions will occur on-chain, and ZK technology will be a catalyst for this growth.”
The testing process is considered significant for establishing a robust technical infrastructure for the product. Additionally, the fluctuations in the ZKtoken price are being closely monitored in the context of market volatility.
This trial provides valuable insights into the digitization of the fintech sector and the application of blockchain technology in finance. The technical tests and applications conducted during the trial can serve as a guide for the product’s integration into global markets.