Capital markets News

UBS issues tokenized warrant on Ethereum blockchain


Today UBS announced the issuance of an investment-grade tokenized warrant in Hong Kong on the Ethereum public blockchain. It used the UBS Tokenize issuance solution. It was a call warrant on Xiaomi stock and was sold to OSL Digital Securities.

“The introduction of the UBS tokenized warrant reinforces the bank’s position as the leading derivative products issuer in Hong Kong,” said Winni Cheuk, Head of Sales, APAC Public Distribution, UBS Global Markets. “Created natively on a public blockchain in a permissioned environment, this innovative product enhances transparency, reduces transaction fees, streamlines settlement processes, and allows for more flexible trading hours.”

UBS has long been active in the institutional DLT space – it was cofounder of the institutional payment system Fnality. Recently it has been flexing its muscles in web3. 

UBS’s expanding tokenization initiatives

In late 2022 UBS Wealth Management issued $50 million in digital debt securities to Asian high net worth individuals. That was followed last year by the Bank of China Investment (BOCI) issuing digital structured notes on Ethereum using the UBS Tokenize platform. 

Additionally, UBS participated in multiple public blockchain trials as part of Singapore’s Project Guardian. One involved a pilot for a tokenized money market fund issued on Ethereum. Another was for cross border repo – the sale and repurchase of a natively issued digital bond on a public blockchain. SBI and DBS partnered for the experiment, which spanned Japan, Singapore, and Switzerland.

Beyond public blockchain trials, UBS is in production with intraday cross border repo. It was one of the first banks to adopt Broadridge’s Distributed Ledger Repo (DLR), a permissioned blockchain infrastructure. A few months before the Project Guardian repo, UBS used DLR for a cross border intraday repo involving an Asian bank.

In related news, UBS is one of the five banks participating in Hong Kong’s second government digital green bond issuance. Goldman Sachs’ tokenization platform was used for the first bond, with HSBC’s Orion for the second. Hence, UBS Tokenize could be used in a future issuance.

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