Swiss bank UBS is currently conducting blockchain testing for digital gold investments on ZKsync

UBS is utilizing ZKsync to test blockchain technology for digital gold trading, with the objective of improving the security, scalability, and accessibility of the process for retail investors.

UBS, the largest bank in Switzerland, is currently conducting an initiative to modernize digital gold investments for retail investors by utilizing blockchain technology.

The Union Bank of Switzerland (UBS), which manages over $5.7 trillion in assets, has successfully executed a proof-of-concept for its fractional gold investment product, UBS Key4 Gold, on the Ethereum layer-2 (L2) network ZKsync Validium.

UBS intends to resolve scalability, privacy, and interoperability in order to facilitate the global expansion of the retail-facing product by utilizing ZKsync.

According to Alex Gluchowski, the inventor of ZKsync, the blockchain-based proof-of-concept is indicative of UBS’ ongoing endeavors to investigate the potential of blockchain technology to improve its financial services.

In a post on X on January 31, he stated, “I am convinced that the future of finance will occur onchain, and ZK technology will serve as the catalyst for development.”

UBS Key4 Gold was initially developed on the UBS Gold Network, a permissioned blockchain that connects vaults, liquidity providers, and distributors.

By utilizing offchain data storage, Validium enhances privacy, interoperability, and transaction throughput when its solution is running on ZKsync.

Cointelegraph reported on Nov. 1, 2024, that the blockchain-based prototype follows the launch of a tokenized fund on Ethereum by UBS, which aimed to integrate Ether “directly into the core of traditional finance.”

ZKsync has established ambitious objectives for 2025, including the reduction of transaction fees to $0.0001 and the processing of 10,000 transactions per second (TPS).

In order to enhance the security, privacy, and scalability of the Ethereum mainnet, the L2 scaling solution employs zero-knowledge proofs (ZK-proofs).

ZKsync’s 2025 roadmap, which was disclosed in a blog post on December 12, 2024, indicates that the company intends to enhance usability by increasing its performance to over 10,000 TPS and decreasing its transaction fees to $0.0001.

ZKsync’s technology may become more appealing to architects if it is capable of achieving over 10,000 TPS for Ethereum-native ERC-20 tokens.

According to Remi Gai, the founder of Inco, “Privacy-preserving technologies might encourage institutional adoption of blockchain.”

Gai stated to Cointelegraph during the 2024 FHE Summit that institutions prioritize privacy:

“The transparency of the space continues to pose a challenge for institutions. Enabling an experience that is comparable to the one they are accustomed to in Web2 could result in increased liquidity, use cases, larger participants, and investment in the space.”

Confidential computing technologies offer financial institutions substantial opportunities. For instance, fully homomorphic encryption solutions permit the execution of computations on encrypted data without the need to decrypt it.

Gai suggests that the crypto space could access the next $1 trillion in capital through the implementation of confidential computing, provided that technological advancements persist.

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