Swiss Banking Giant UBS Tests Blockchain for Fractional Gold Trading

Swiss Banking Giant UBS Pushes Blockchain Innovation in Gold Trading

In an effort to update digital gold investments for individual investors, UBS, the biggest bank in Switzerland, is experimenting with blockchain technology. Using the Ethereum layer-2 (L2) network ZKsync Validium, the Union Bank of Switzerland (UBS), which manages assets worth over $5.7 trillion, has finished a proof-of-concept for its fractional gold investment product, UBS Key4 Gold.

With ZKsync, UBS hopes to solve interoperability, scalability, and privacy for the global expansion of the retail-facing offering. The author of ZKsync, Alex Gluchowski, said the blockchain-based proof-of-concept demonstrates UBS’ ongoing efforts to investigate how blockchain may improve its financial offerings.

I firmly believe that the future of finance will take place onchain and ZK technology will be the catalyst for growth,

Gluchowski

The foundation of UBS Key4 Gold was the bank’s UBS Gold Network, a permissioned blockchain that links distributors, liquidity providers, and vaults. With the goal of integrating Ether directly into traditional finance, UBS introduced a tokenized fund on Ethereum almost three months prior to the blockchain-based trial.

ZKsync Targets 10,000 TPS and Near-Zero Fees in 2025 Scaling Plan

With aggressive goals for 2025, ZKsync wants to handle 10,000 transactions per second (TPS) and cut transaction fees to $0.001. Zero-knowledge proofs, or ZK-proofs, are used in the L2 scaling solution to increase the Ethereum mainnet’s scalability, security, and privacy. According to a 2025 plan published in a blog post on Dec. 12, 2024, ZKsync wants to increase its performance to over 10,000 TPS and lower its transaction costs to $0.0001 in an attempt to improve usability.

Will Privacy Tech Bridge the Gap Between Institutions and Blockchain?

According to Inco creator Remi Gai, institutional adoption of blockchain may be fueled by privacy-preserving technology. Gai stated during the 2024 FHE Summit that institutions value privacy.

Institutions are still having a hard time entering the space because everything is transparent. If you enable an experience similar to what they’re comfortable with in Web2, suddenly, this could bring more liquidity, use cases, bigger participants and money to enter the space.

Gai

As technology advances, Gai believes that confidential computing could unlock the next $1 trillion in funding for the cryptocurrency industry.

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