Switzerland’s largest bank, UBS, is pioneering blockchain adoption in the traditional finance sector by integrating digital gold investments with Ethereum’s Layer-2 network, ZKsync Validium. With over $5.7 trillion in assets under management, UBS has successfully completed a proof-of-concept for its UBS Key4 Gold product, leveraging blockchain technology to enhance scalability, privacy, and interoperability for retail investors. This move signals the bank’s commitment to modernizing gold trading through decentralized solutions.

UBS Key4 Gold was originally built on the UBS Gold Network, a permissioned blockchain that connects vaults, liquidity providers, and distributors. Transitioning to ZKsync Validium introduces an added layer of privacy and efficiency, enabling high-throughput transactions through off-chain data storage. Alex Gluchowski, the inventor of ZKsync, emphasized the transformative potential of blockchain in finance, stating that “the future of finance will take place onchain” and that ZK technology will serve as the catalyst for this evolution. UBS’ blockchain expansion follows its recent launch of a tokenized Ethereum-based fund, reinforcing its mission to integrate decentralized solutions into mainstream financial services.

ZKsync is aiming to scale Ethereum to unprecedented levels, targeting 10,000 transactions per second (TPS) with near-zero fees of just $0.0001 by 2025. The use of zero-knowledge proofs (ZK-proofs) ensures enhanced security, efficiency, and privacy, positioning ZKsync as a game-changing technology for financial applications. Achieving these ambitious goals could attract a wave of institutional interest and further the adoption of blockchain in traditional markets.

Privacy remains a key concern for institutional players hesitant to enter the crypto space. According to Remi Gai, founder of Inco, blockchain transparency has been a major roadblock for large-scale adoption. Technologies like fully homomorphic encryption (FHE), which enable computations on encrypted data without decryption, could provide the level of confidentiality required by financial institutions. With continuous development in privacy-focused blockchain solutions, confidential computing could unlock a trillion-dollar opportunity, driving institutional capital into the crypto ecosystem.