The Union Bank of Switzerland (UBS), the largest bank in Switzerland, is currently conducting trials for a digital gold investment product on the Ethereum 2,743-based ZKsync layer-2. The purpose of this initiative is to assess the use of blockchain technology in gold trading operations and enhance its functionality on a global scale.
The product being tested, called UBS Key4 Gold, enables users to trade gold units on-chain. It offers individual investors the opportunity to invest in fractional gold, with real-time pricing, deep liquidity, and secure physical storage options.
During the trial, UBS utilized the ZKsync Validium solution within a proof of concept (PoC) framework. The main objective was to enhance scalability, privacy, and interoperability in order to facilitate the global expansion of the product.
UBS Key4 Gold operates on a permissioned blockchain infrastructure known as the UBS Gold Network. This network connects vaults, liquidity providers, and distributors, providing the necessary technical support for the product. This is seen as a significant step towards the digitization of the gold market.
Alex Gluchowski, one of the co-founders of ZKsync, expressed his belief that UBS’s efforts to develop financial products using blockchain technology reflect the future of on-chain financial transactions, with ZK technology acting as a catalyst for this growth.
The testing process is crucial for establishing a robust technical infrastructure for the product. Furthermore, 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 integrating the product into global markets.
