Swiss bank UBS is testing a Layer 2 solution based on the ZKsync protocol for institutional and retail investments in tokenized gold.
Switzerland’s largest bank UBS is experimenting with blockchain technology within the Ethereum ecosystem to offer its clients an innovative investment solution for tokenized gold. To achieve this, the bank tested ZKsync’s Validium scaling technology, which enables off-chain data processing while utilizing on-chain proofs to ensure data integrity.
UBS representatives launched a pilot investment product, UBS Key4 Gold, deployed using ZKsync technology on the private blockchain network UBS Gold Network, which connects vaults, liquidity providers, and distributors. During the launch, a proof of concept (PoC) was successfully completed.
As part of the PoC, smart contracts were deployed on a testnet to replicate key functions, including the issuance of gold-backed tokens, transaction processing, and reconciliation. The results demonstrated that the solution provides security, scalability, and accessibility for institutional and retail investors, ensuring privacy, high transaction volume processing, and interoperability.
Specifically, participants will be able to view only their own on-chain activity. The connection to Ethereum’s base layer is established through a smart contract responsible for data verification and enabling the use of stablecoins issued on Ethereum. High throughput is achieved by storing the main data set off-chain.
It’s worth noting that UBS is actively developing various financial projects using blockchain technology. In November 2024, the bank successfully tested UBS Digital Cash, a private blockchain-based payment solution designed to enhance transparency, security, and speed in cross-border transactions.
