UBS Expands Blockchain Use for Digital Gold Trading on ZKsync

By Tatevik Avetisyan 3 Min Read
UBS Expands Blockchain Use for Digital Gold Trading on ZKsync.

YEREVAN (CoinChapter.com) —  Switzerland’s UBS, managing over $5.7 trillion in assets, is testing blockchain technology for digital gold investments. The bank completed a proof-of-concept for its UBS Key4 Gold investment product on ZKsync Validium, an Ethereum layer-2 (L2) network.

ZKsync offers scalability, security, and privacy, making it a potential choice for retail investors. The blockchain solution supports higher transaction speeds while maintaining data integrity.

UBS ZKsync Gold Test. Source: ZKsync
UBS ZKsync Gold Test. Source: ZKsync

Alex Gluchowski, the inventor of ZKsync, commented on the project, stating,

“I firmly believe that the future of finance will take place onchain, and ZK technology will be the catalyst for growth.”

UBS Key4 Gold on ZKsync. Source: ZKsync
UBS Key4 Gold on ZKsync. Source: ZKsync

He made this statement on Jan. 31.

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UBS Key4 Gold Moves to ZKsync Validium

Initially, UBS Key4 Gold operated on the UBS Gold Network, a permissioned blockchain connecting vaults, liquidity providers, and distributors. The shift to ZKsync Validium brings offchain data storage, allowing for faster transactions and improved privacy protection.

This pilot follows UBS’ launch of a tokenized fund on Ethereum in November 2024, which aimed to integrate Ether (ETH) into traditional finance. The transition to ZKsync aligns with ongoing blockchain expansion in financial services.

ZKsync’s zero-knowledge proofs (ZK-proofs) enable transactions with improved security and efficiency, reducing congestion on Ethereum’s mainnet. The network supports interoperability, helping institutions integrate blockchain solutions into their existing financial systems.

ZKsync Plans for 10,000 Transactions Per Second

ZKsync’s roadmap for 2025 outlines plans to reach 10,000 transactions per second (TPS) with near-zero fees. The project aims to reduce transaction costs to $0.0001, making blockchain-based payments more cost-effective.

ZKsync Roadmap 2025. Source: ZKsync
ZKsync Roadmap 2025. Source: ZKsync

The ability to process Ethereum-native ERC-20 tokens at high speeds could increase adoption by financial institutions. Faster transactions with lower fees could improve usability for blockchain applications in digital gold trading.

Privacy Concerns in Blockchain Adoption

Privacy-preserving solutions remain a key focus for financial institutions. Remi Gai, founder of Inco, spoke at the FHE Summit 2024, addressing privacy challenges. He stated:

“Institutions are still having a hard time entering the space because everything is transparent. If you enable an experience similar to what they’re comfortable with in Web2, suddenly, this could bring more liquidity, use cases, bigger participants, and money to enter the space.”

Confidential computing solutions, including fully homomorphic encryption, allow financial firms to process encrypted transactions without exposing sensitive data. According to Gai, continued technological development could bring an additional $1 trillion in capital to the crypto market.

UBS and ZKsync continue exploring blockchain’s role in financial services, focusing on scalability, privacy, and institutional adoption.