UBS Tests Key4 Gold on Ethereum’s ZKSync

Swiss banking giant UBS is testing the ZKSync network to advance its blockchain operations. UBS is doing this by implementing its Key4 Gold platform.

The experiment aims to study blockchain systems, which focus on enhancing security in gold investments and improving confidentiality. Let’s discover more about this collaboration with ZKSync.

Why UBS Chose ZKSync for Key4 Gold

Gold remains the preferred investment for investors, yet UBS searches for blockchain-powered enhancements. UBS did not select ZKSync impulsively. The banking organization needed a system to handle many transactions. It also had to protect user data. Here’s why ZKSync stood out:

• Scalability: ZKSync’s Validium mode lets UBS process transactions quickly. It does this by storing some data off-chain, reducing congestion on Ethereum.
• Security & Privacy: It ensures that transactions remain secure while keeping personal details private.
• Efficiency: The system allows for the creation of gold tokens, making tracking and transferring ownership easy.

.@UBS, Switzerland’s largest bank, is modernizing digital gold investments on @ZKsync.

In a PoC for UBS Gold, they tested ZKsync Validium. The goal: To address scalability, privacy, and interoperability for global expansion.

Let’s dive in pic.twitter.com/4SW2xOfRlS

— ZKsync (∎, ∆) (@zksync) January 31, 2025

UBS performed tests by activating genuine smart contracts that symbolized gold trading operations. They then conducted real-world transactions to check the system’s performance firsthand. A successful implementation would improve how investors buy gold. It will also open the door to fractional ownership investments for retail users.

What This Means for Gold Investors

The key4 Gold platform from UBS aims to extend easy access to gold investment combined with flexible usage options. Key4 Gold will provide investors with several new features once implemented.

• Traders can access live updates of gold price movements for better investment choices.
• Unlimited transactions without slow processing times.
• Secure storage with the option for physical gold delivery if needed.

The ZKSync system connects banks with vaults and liquidity providers. It operates on a user-centric blockchain network and includes permission controls for added security. Users who invest in gold can now enjoy secure investment processes.

In a Proof-of-concept, UBS deployed smart contracts on a ZKsync Validium testnet to simulate the UBS Gold Network and replicate key functions like

→ Gold token issuance
→ Transaction processing
→ Reconciliation

The successful PoC demonstrated that ZKsync Validium mode was…

— ZKsync (∎, ∆) (@zksync) January 31, 2025

Christoph Puhr, UBS’s Digital Assets Lead, highlighted a major challenge in digital finance: scaling blockchain solutions is difficult. At the same time, transactions must remain private and efficient. This test proves that Layer-2 networks like ZKSync can solve these issues.

Disclaimer

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