UBS tests blockchain for gold. UBS is testing blockchain technology for digital gold trading to improve accessibility, scalability, and security for individual investors.
In an effort to update digital gold investments for individual investors, UBS, the biggest bank in Switzerland, is experimenting with blockchain technology.
The Union Bank of Switzerland (UBS), with over $5.7 trillion in assets under management, has created a proof-of-concept for its fractional gold investment product, UBS Key4 Gold, on the Ethereum layer-2 (L2) network ZKsync Validium.
UBS hopes to solve interoperability
Privacy and scalability for the global expansion of the retail-facing offering by utilizing ZKsync.
According to Alex Gluchowski, the inventor of ZKsync, the blockchain-based proof-of-concept is a reflection of UBS’ “continued efforts to explore how blockchain can enhance its financial offerings.”
He stated in an X post on January 31 that “I firmly believe that the future of finance will take place on-chain and ZK technology will be the catalyst for growth.”
The foundation of UBS Key4 Gold was the bank’s UBS Gold Network, a permissioned blockchain that links distributors, liquidity providers, and vaults.
Because of off-chain data storage, using ZKsync Validium to run its solution improves privacy, interoperability, and transaction performance.
ZKsync aims for 10,000 TPS and near-zero fees in the 2025 roadmap
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 roadmap 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.
UBS tests blockchain for gold. Privacy technology may drive crypto adoption
Privacy-preserving technologies could drive institutional adoption of blockchain, according to Remi Gai, founder of Inco.
During the FHE Summit 2024, Gai told Cointelegraph that privacy is important to institutions:
“Because everything is transparent, institutions are still having trouble getting inside. Suddenly, more liquidity, use cases, larger participants, and funding might enter the market if you make it possible for them to have an experience that is comparable to what they are accustomed to in Web2.”
Technologies for confidential computing offer financial companies a lot of opportunities. Fully homomorphic encryption methods, for instance, allow calculations to be performed on encrypted data without the need to decrypt it.