Switzerland’s largest financial institution, UBS, has accomplished a proof-of-concept (PoC) utilizing ZKsync Validium, an Ethereum layer-2 (L2) resolution, to reinforce its fractional gold funding product, UBS Key4 Gold. Notably, the pilot goals to handle scalability, privateness, and interoperability challenges in digital gold buying and selling.
Swiss UBS: Enhancing Scalability and Safety
The PoC was carried out on a ZKsync Validium testnet to simulate the UBS Gold Community, a permissioned blockchain linking vaults, liquidity suppliers, and distributors. By means of this trial, UBS efficiently replicated key capabilities corresponding to gold token issuance, transaction processing, and reconciliation.
Christoph Puhr, Digital Property Lead for UBS Group, emphasised the significance of blockchain innovation within the monetary sector within the announcement on X.
“That is one other nice instance of how UBS collaborates with know-how suppliers to remain on the forefront of innovation. While tokenized securities maintain lots of potential to carry new options to our purchasers, scalability, privateness, and interoperability stay key challenges to beat. Our PoC with ZKsync demonstrated that Layer 2 networks and ZK know-how maintain the potential to resolve these.”
Key Options of UBS Key4 Gold on ZKsync
UBS Key4 Gold permits retail traders to purchase fractional quantities of gold with options together with real-time pricing, deep liquidity, safe storage, and non-obligatory bodily supply. By integrating ZKsync Validium, the PoC demonstrated a number of enhancements:
Privateness: Customers may solely entry their exercise whereas sustaining verifiability via Ethereum’s L1 bridge good contract.Interoperability: Stablecoins bridged from Ethereum had been used to buy gold tokens.Scalability: Off-chain information storage diminished prices and improved transaction throughput.
Alex Gluchowski, co-inventor of ZKsync, highlighted the broader implications of the know-how. “This PoC displays UBS’ continued efforts to discover how blockchain can improve its monetary choices and help its broader digital asset technique. I firmly consider that the way forward for finance will happen onchain and ZK know-how would be the catalyst for development.”
Broader Implications for UBS and ZKsync
This blockchain-based pilot follows UBS’s earlier blockchain initiatives, together with the launch of a tokenized fund on Ethereum in November 2024. The financial institution continues to discover methods blockchain can combine with conventional monetary buildings.
In the meantime, ZKsync is pushing towards its 2025 roadmap targets, aiming for transaction speeds of 10,000 transactions per second (TPS) and near-zero charges. The zero-knowledge proof know-how (ZK-proofs) underpinning ZKsync goals to enhance Ethereum’s scalability, safety, and privateness.
As UBS evaluates the outcomes of its PoC, the adoption of blockchain in conventional banking may additional speed up, significantly in tokenized belongings and digital securities
