
UBS, Switzerland’s largest bank, is advancing its digital gold investment offerings by testing blockchain technology on ZKsync, an Ethereum layer-2 network. This move is part of UBS’s effort to enhance the scalability and security of its retail investment product, UBS Key4 Gold. By leveraging ZKsync, UBS aims to improve privacy and interoperability, addressing crucial needs for the global expansion of its offerings. This initiative follows a recent launch of a tokenized fund on Ethereum by UBS, signaling the bank’s commitment to integrating blockchain technology into traditional finance.
The utilization of ZKsync positions UBS to handle higher throughput transactions with improved privacy due to its offchain data storage capabilities. The choice of ZKsync comes as the network plans to achieve processing of 10,000 transactions per second by 2025, with near-zero transaction fees, making it an appealing option for blockchain developments. The inventor of ZKsync, Alex Gluchowski, emphasized the potential of zero-knowledge technology to drive growth in the financial sector, underscoring a belief in an onchain future for finance.
In a broader context, privacy-preserving technologies are considered key to increasing institutional adoption of blockchain. By offering confidential computing capabilities, such technologies can make blockchain platforms more familiar to traditional financial institutions. This could potentially unlock significant capital inflows into the crypto space, estimated by some experts to reach $1 trillion.