Thomas Daniels
Giant Swiss Banking ZKsync is being tested by UBS for fractional gold investments.
The biggest bank in Switzerland, UBS, is experimenting with blockchain technology to update digital gold investments for individual clients. Using the Ethereum layer-2 (L2) network ZKsync Validium, the financial institution, which oversees more than $5.7 trillion in assets, has finished a proof-of-concept for its fractional gold investment product, UBS Key4 Gold.
By tackling the main issues surrounding digital gold trade, the effort seeks to improve security, scalability, and accessibility. By using ZKsync, UBS hopes to improve transaction efficiency, privacy, and interoperability while easing the product’s international growth.
UBS Key4 Gold: Using Blockchain to Transform Digital Gold
UBS Key4 Gold, which was first created on the UBS Gold Network, a permissioned blockchain that links distributors, liquidity providers, and vaults, is now taking advantage of ZKsync Validium’s off-chain data storage. Through this integration, transaction throughput is increased while data confidentiality is maintained.
ZKsync’s creator, Alex Gluchowski, highlighted the significance of blockchain technology for the financial industry’s future by saying:
“I firmly believe that the future of finance will take place onchain, and ZK technology will be the catalyst for growth.”
In an effort to integrate Ether (ETH) into conventional finance, UBS launched a tokenized fund on Ethereum in November 2024, which was followed by this blockchain-based test.
ZKsync’s 2025 Roadmap: Almost Zero Fees and 10,000 TPS
Aiming for over 10,000 transactions per second (TPS) and transaction rates as low as $0.0001, ZKsync has laid forth an ambitious 2025 plan. Zero-knowledge proofs, or ZK-proofs, are used in the L2 scaling solution to improve Ethereum’s scalability, security, and privacy.
The platform may become increasingly appealing to developers and financial institutions due to its capacity to handle Ethereum-native ERC-20 tokens quickly.
Technologies that Protect Privacy and Institutional Adoption
Blockchain adoption by institutions is still difficult since public ledgers are transparent. The founder of Inco, Remi Gai, believes that privacy-focused solutions may hold the secret to releasing institutional money.
Gai underlined at the FHE Summit 2024 that giving institutions a Web2-like experience could encourage increased adoption:
“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.”
According to Gai, a breakthrough that could unleash the next $1 trillion in crypto capital is the ability to do computations on encrypted data without the need for decryption thanks to technologies like fully homomorphic encryption (FHE).
Digital assets are destined for wider institutional usage in 2025, with ZKsync pushing the frontiers of scalability and UBS leading the way in blockchain-based gold investments.
