February 5, 2025
By Anjali Kochhar
UBS, Switzerland’s premier banking institution, is actively exploring the expansion of its digital gold investment platform, UBS key4 gold, beyond its domestic market. To assess the feasibility of this international extension, the bank conducted a proof of concept (PoC) utilizing ZKsync, an Ethereum Layer 2 scaling solution. This initiative underscores UBS’s commitment to leveraging advanced blockchain technologies to enhance its financial product offerings.
The UBS key4 gold platform currently enables Swiss retail and wealth clients to invest in fractional amounts of physical gold seamlessly through their smartphones. These investments are securely stored in UBS vaults, and the entire process is managed via a permissioned blockchain known as the UBS Gold Network. By integrating blockchain technology, UBS ensures transparency, security, and efficiency in gold transactions.
In its recent PoC, UBS collaborated with ZKsync to explore the scalability, privacy, and interoperability of Layer 2 blockchain solutions.
Christoph Puhr, Digital Assets Lead for UBS Group, emphasized the significance of this exploration, stating, “While tokenized securities hold a lot of potential to bring new solutions to our clients, scalability, privacy, and interoperability remain key challenges to overcome. Our PoC with ZKsync demonstrated that Layer 2 networks and ZK technology hold the potential to resolve these.”
The successful implementation of ZKsync’s technology in the PoC indicates that UBS could potentially offer its digital gold investment services to clients outside Switzerland. Layer 2 solutions like ZKsync are designed to enhance the performance of blockchain networks by increasing transaction throughput and reducing fees, all while maintaining the security and decentralization inherent to Ethereum.
UBS’s engagement with blockchain technology is not a recent development. In November 2024, the bank piloted a blockchain-based payment system named UBS Digital Cash, aiming to improve the efficiency of cross-border transactions. This system facilitated domestic transactions within Switzerland and cross-border payments in multiple currencies, including U.S. dollars, Swiss francs, euros, and Chinese yuan.
Andy Kollegger, head of UBS Institutional & Multinational Banking, highlighted blockchain-based payment solutions for cross-border payments as a strategic focus for UBS. He noted, “UBS Digital Cash going forward aims to enable our clients to make cross-border payments in a much more efficient and transparent way.”
Furthermore, UBS has been at the forefront of financial innovation through its UBS Tokenize platform. This platform supports the creation and development of digital strategies and products, offering clients access to new, innovative markets. By utilizing blockchain technology, UBS Tokenize aims to provide a more resilient and efficient system, minimizing disruptions and errors inherent in traditional financial intermediaries. The platform also leverages smart contracts to automate security lifecycle events, thereby enhancing security and reducing costs for transacting parties.
On November 2023, UBS, in collaboration with SBI and DBS, executed the world’s first live repurchase transaction involving a natively-issued digital bond on a public blockchain. This transaction demonstrated the potential of blockchain technology to enable real-time, cross-border settlements in a highly efficient and cost-effective manner.
Mike Dargan, UBS Group Chief Operations and Technology Officer, remarked, “With this pioneering transaction, we proved the feasibility of executing a fully automated and instantly settled transaction across several jurisdictions by leveraging a public DLT network under a strict compliance framework.”
UBS’s ongoing initiatives reflect its dedication to integrating cutting-edge blockchain solutions into its service offerings. By addressing challenges related to scalability, privacy, and interoperability, the bank is well-positioned to expand its digital gold investment platform globally, providing clients with innovative and efficient financial products.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
