- The bank previously launched an Ethereum-based money market fund, reinforcing its commitment to blockchain innovation.
- Stablecoin integration within Ethereum aims to reduce costs and improve efficiency for gold token purchases.
The future of gold trading may be shifting to the blockchain as UBS, one of the world’s largest financial institutions, successfully tests its offering on the Ethereum blockchain network. According to an X post by ZKSync, this move signals growing institutional interest in using blockchain to enhance investment efficiency, security, and accessibility.
ZKSync confirmed that UBS, which reportedly manages assets worth $5.7 trillion, is testing how blockchain technology can streamline gold investments. The test aims to allow Swiss customers to purchase physical gold through a blockchain-based system while ensuring privacy, scalability, and interoperability.
Specifically, UBS Key4 Gold enables retail investors to buy fractional gold shares, providing real-time pricing, deep liquidity, and secure storage. The platform operates on the UBS Gold Network, a permissioned blockchain connecting vaults, liquidity providers, and distributors.
To optimize efficiency, UBS employed ZKSync’s Validium mode, a zero-knowledge roll-up solution that improves scalability by storing data off-chain. The proof-of-concept involved deploying smart contracts on the Validium testnet to simulate the UBS Gold Network by facilitating gold token issuance and transaction processing.
See Related: UBS Tests Blockchain Payments For Cross-Border Transfers
Gold Based On Blockchain Technology
In addition to scalability, the testnet focused on privacy, allowing participants to see only their own transactions while maintaining verification mechanisms. Additionally, stablecoin integration within Ethereum made gold token purchases more cost-effective and efficient. UBS’ Broader Blockchain StrategyUBS’ exploration of blockchain for gold trading is part of a larger institutional trend toward tokenization in traditional finance.
The bank launched an Ethereum-based money market investment fund previously, signaling its commitment to blockchain innovation. ZKSync echoed this view, emphasizing that zero-knowledge technology could accelerate Web3 adoption by providing a strong foundation for tokenized assets.
As more financial institutions explore blockchain-based solutions, the integration of traditional assets with decentralized technology appears to be gaining momentum.
