Swiss bank UBS announced the completion of the Key4 Gold service pilot project built on the ZKsync network. This move shows the bank's increasing interest in using blockchain for financial innovations.
Renewed Interest in Blockchain
The simulations conducted on the ZKsync test network are seen as a sign of traditional financial institutions' renewed interest in blockchain technology. Previously, UBS launched the tokenized money market investment fund uMint on the Ethereum platform. The Key4 Gold service allows Swiss clients to own physical gold with features like real-time pricing, deep liquidity, and secure storage.
Privacy and Scalability
Although the project operates on UBS's private blockchain, the team explored ways to maintain privacy while enhancing scalability. Pearl Imbach of Matter Labs stated, 'They decided that only zero-knowledge proof (ZK) methods made sense for them, and thus wanted to implement this in practice using an existing product.'
>CITE_W_A > 'The services we now offer with added privacy on blockchain are very interesting, and we are increasingly implementing such use cases.' – Imbach.
Prospects of Banking Blockchain Solutions
ZKsync is a layer-2 scaling system that increases transaction speed and reduces costs using zero-knowledge rollups. The test operation suggests that UBS may closely examine layer-2 technologies to support some of its activities. In December, Deutsche Bank announced plans to build a layer-2 solution using ZKsync technology, indicating blockchain technology could align with traditional financial institution products.
UBS's Key4 Gold project reflects financial institutions' efforts to offer clients more flexible and secure investment options through blockchain technology.
