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UBS Tests Blockchain for Digital Gold Investments on ZKsync

UBS Taps Blockchain for Digital Gold Investments on ZKsync Switzerland’s largest bank, UBS, is trying to modernize digital gold trading for retail investors using blockchain. The bank has completed a proof-of-concept for its fractional gold investment platform, UBS Key4 Gold, using ZKsync Validium, an Ethereum layer-2 (L2) solution. This is to enhance security, scalability, and accessibility for global users. UBS Key4 Gold and Blockchain Integration With over $5.7 trillion in assets under management, UBS is positioning itself to make a blockchain-based financial play. First based on the bank’s permissioned UBS Gold Network, which linked vaults, liquidity providers, and distributors, UBS Key4 Gold is now positioning to make a blockchain-based financial play. By adding ZKsync Validium, UBS hopes to enhance transaction privacy and scalability without sacrificing ease of trading. Off-chain data storage enables higher-throughput transactions while maintaining security. ZKsync Validium: Building up Financial Services Enabled by zero-knowledge proof technology, ZKsync allows for scalability and privacy of transactions. The L2 network is designed to process more than 10,000 transactions per second with considerable slashing in transaction fees. Alex Gluchowski, inventor of ZKsync, thinks that blockchain will have a central role in the financial world of tomorrow. “I strongly believe in the future that all finance will take place on-chain, and it is ZK technology which will drive that growth,” he said. UBS’ creation of a tokenized fund on Ethereum is its latest of various recent blockchain plays, continuing an integration of digital assets into the mainstream bank’s offerings. Driving Institutional Adoption Through Innovations in Privacy This is because institutional adoption has been slow due to concerns about privacy and transparency. At the FHE Summit 2024, Remi Gai, founder of Inco, reiterated on-chain, privacy-preserving solutions are key to attracting investors from institutional investors. “Institutions are still wary because of transparency issues. If we could create an experience similar to Web2, that could drive more liquidity and participation,” said Gai. Confidential computing solutions, such as fully homomorphic encryption, make it possible to process data in encrypted form without decryption , and this is a game-changer for financial institutions. Gai says that privacy-preserving blockchain technology could unlock $1 trillion of new capital and further accelerate institutional involvement in digital assets. While UBS continues with its blockchain explorations, the integration of ZKsync Validium is an indication of how traditional banking is moving toward decentralized financial solutions.

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