UBS, Switzerland's largest bank managing over $5.7 trillion in assets, has successfully completed testing its digital gold investment product on an advanced blockchain platform. The bank's Key4 Gold service was tested on ZKSync Validium, an Ethereum Layer-2 network, marking a notable advance in modernizing precious metal trading.
The Key4 Gold platform enables Swiss clients to invest in fractional amounts of physical gold through their smartphones, with real-time pricing and secure storage in UBS vaults. The gold can be traded remotely, and customers maintain the option for physical delivery.
Previously running on the private UBS Gold Network, the move to test on ZKSync Validium aims to enhance three key aspects: scalability for handling higher transaction volumes, privacy protection for users, and seamless transfer of assets across different blockchain networks.
"The future of finance will take place onchain and ZK technology will be the catalyst for growth," stated Alex Gluchowski, ZKSync's inventor, commenting on the successful test.
This development follows UBS's recent blockchain initiatives, including the launch of a tokenized fund on Ethereum in late 2024. The bank's digital assets lead, Christoph Puhr, highlighted the institution's commitment to advancing financial technology through blockchain integration.
The test represents a growing trend among major financial institutions exploring blockchain solutions. Other global banks, including JPMorgan, Citi, and Deutsche Bank, have also begun incorporating distributed ledger technology into their services for various financial operations.
This proof-of-concept demonstrates UBS's strategic approach to modernizing traditional banking services while maintaining high standards of security and efficiency. The successful test could pave the way for broader adoption of blockchain technology in precious metal trading and other financial services.