UBS Tests Ethereum’s ZKsync for Its Offerings
Switzerland’s largest bank, UBS, is piloting ZKsync for its Key4 Gold investment offering. UBS Key4 Gold allows for fractional gold investments and is built on the UBS Gold Network, a permissioned blockchain that connects vaults, liquidity providers, and distributors.
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This initiative highlights the increasing interest of traditional financial institutions in integrating blockchain technology to improve their services. UBS Key4 Gold enables Swiss clients to purchase direct claims to physical gold, offering fractional investments with real-time pricing, deep liquidity, secure storage, and optional physical delivery.
To scale this service while maintaining client privacy, UBS explored different solutions and determined that zero-knowledge technology was the most suitable approach. As a result, they partnered with Matter Labs, the primary developer behind ZKsync, to explore the use of Validium – a Layer 2 scaling solution that stores transaction data off-chain.
In an X post, ZKsync explained that UBS deployed smart contracts on a ZKsync Validium testnet to simulate the UBS Gold Network and replicate key functions, such as gold token issuance and transaction processing.
The results of the Proof of Concept demonstrated that ZKsync Validium mode provided privacy, interoperability, and scalability.
Christoph Puhr, UBS Group’s Digital Assets Lead, stated:
This is another great example of how UBS collaborates with technology providers to stay at the forefront of innovation
He also highlighted the potential of tokenized securities and how Layer 2 networks and ZK technology could help solve major challenges like scalability, privacy, and interoperability.
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