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- UBS tested Key4 Gold on ZKSync to improve gold investment security and efficiency using blockchain technology.
- The trial used smart contracts and tokenized gold to explore scalability, privacy and interoperability in banking.
- UBS aims to integrate blockchain into financial services to enhance gold trading and expand decentralized solutions.
Swiss banking giant UBS has tested its Key4 Gold product on the Ethereum Layer-2 network, ZKSync Validium. The research aimed to evaluate blockchain’s potential to enhance gold investment while maintaining user privacy and improving operational efficiency.
UBS, a leading Swiss bank, is testing a new digital gold investment platform on the Ethereum-based layer-2 network, ZKsync. This platform, known as UBS Key4 Gold, facilitates direct blockchain trading of gold, offering individual investors fractional ownership with real-time…
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UBS Expands Blockchain Research
The Proof-of-Concept (PoC) was conducted on a ZKSync test network. This aligns with UBS’s broader blockchain initiatives, including uMint and tokenized money market investments. The bank continues to explore decentralized solutions to offer fractional gold investment services to retail customers.
UBS Key4 Gold provides real-time gold market values, unlimited transactions, and secure storage. Clients can also opt for physical delivery. The UBS Gold Network integrates vaults, liquidity providers, and distributors through a permissioned blockchain.
Overcoming Key Challenges
UBS addressed three major challenges in implementing this blockchain trial. Scalability remained a concern due to high transaction volumes. Data privacy also required robust solutions. Additionally, interoperability was necessary to connect different financial systems seamlessly.
Experts view UBS’s initiative as a step forward for blockchain adoption in banking. ZKSync Validium allowed off-chain data placement, improving transaction speed and security. During testing, UBS used smart contracts to simulate real gold transactions, creating gold tokens and recording discrepancies.
Future of Tokenized Gold Investments
The test demonstrated how second-layer networks can address blockchain limitations. UBS’s digital asset team continues to explore ways to integrate decentralized technology into financial services. The initiative highlights the potential of tokenized gold investments for commercial use.
UBS recently launched a tokenized fund on Ethereum, marking another move toward integrating blockchain into traditional finance. ZKSync plans to process 10,000 transactions per second by 2025 while reducing transaction fees.
The latest developments indicate that blockchain adoption in banking is expanding. Financial institutions continue to explore decentralized technology to enhance traditional investment frameworks.