Swiss Banking Giant UBS Tests Tokenized Gold Trading on Ethereum Layer-2 ZKsync

Union Bank of Switzerland (UBS), the largest banking institution in Switzerland, is exploring the potential of a tokenized gold product using Ethereum ’s layer-2 scalability platform, ZKsync. This trial aims to enhance global functionality for digital assets.

UBS is currently testing its Key4 Gold product on the ZKsync layer-2 network. This platform allows users to engage in on-chain transactions by buying and selling gold units.

According to the developers behind ZKsync, this proof of concept focuses on improving scalability, privacy, and interoperability—crucial for global market integration. Key4 Gold offers fractional gold investments for retail customers, featuring real-time pricing, ample liquidity, secure storage, and delivery options.

Developed on the UBS Gold Network, it utilizes a permissioned blockchain that connects vaults, liquidity providers, and distributors.

Layer-2 solutions are frameworks built on top of existing blockchains (like Ethereum) that help improve scalability and transaction speeds while reducing fees. They process transactions off the main chain before securely settling them on the underlying blockchain, enabling higher throughput and better performance. ZKSync specifically uses zero-knowledge proofs to validate transactions, allowing it to handle thousands of transactions per second while maintaining Ethereum's security guarantees.

ZKsync has reported success in UBS's deployment of smart contracts on its testnet, Validium. Alex Gluchowski, co-founder of ZKsync, stated, "This proof of concept underscores UBS's commitment to leveraging blockchain technologies for better financial services as part of its digital asset strategy. I am convinced that blockchain will be central to the future of finance, with ZK technology leading the way. This test is proof that ZKsync is a suitable environment for tokenized assets and a key player in Web3 advancements."

As of the latest market update, ZKsync’s token is priced at $0.142, marking a 6.8% decrease for the day.