UBS and OSL pioneer Hong Kong’s first Ethereum tokenized warrant.

UBS AG’s recent announcement heralds the launch of Hong Kong’s first investment-grade tokenized warrants utilizing the Ethereum public blockchain network. This pioneering product, a call warrant with Xiaomi Corporation as its underlying asset, represents a fusion of traditional financial mechanisms and avant-garde blockchain technology, potentially reshaping the landscape of digital finance.

These innovative tokenized warrants, sold to OSL Digital Securities Limited, are the first products issued natively on a public blockchain and highlight a significant advancement in the financial derivatives space. The collaboration between UBS and OSL, a subsidiary of the OSL Group, highlights growing synergies between traditional banking institutions and the fast-growing digital asset sector.

Winni Cheuk, Head of Sales, APAC Public Distribution, UBS Global Markets, and Patrick Pan, CEO of OSL Group, both highlighted the numerous benefits offered by this new product. These include increased transparency, reduced transaction fees, streamlined settlement processes, and longer transaction times, all facilitated by the underlying blockchain technology. Tokenized warrants leverage smart contracts to automate and optimize trading and management tasks, increasing efficiency and lowering operating costs.

Tokenizing financial products is not a new business for UBS. The bank has been actively exploring and implementing blockchain solutions since 2015. In 2022, UBS further demonstrated its commitment to digital asset innovation by issuing $50 million of tokenized fixed-rate bonds to Asia Pacific clients through the UBS Tokenization Platform. The issuance of tokenized warrants in collaboration with OSL Digital Securities marks UBS’ continued efforts to expand its digital asset capabilities and explore new avenues for financial products in the blockchain domain.

This initiative not only strengthens UBS’ position as a leader in Hong Kong’s derivatives sector, but also marks a significant milestone in the regulated virtual asset environment. By pioneering the issuance of investment-grade tokenized financial products, UBS and OSL are setting a precedent for the future of financial innovation and opening up new possibilities for accessibility, efficiency and transparency in the digital finance sector.​​​​​​

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