UBS AG today announced the launch of Hong Kong’s first investment grade tokenized warrant on the Ethereum public blockchain network.
This innovative product uses the on-chain issuance product framework offered by UBS Tokenize, the bank’s internal tokenization service.
The product is a call warranty with Xiaomi Corporation as the underlying stock. The tokenized warrant is also the first natively issued warrant on a public blockchain sold to OSL Digital Securities Limited, a licensed virtual asset platform operator and wholly owned subsidiary of OSL Group (formerly BC Technology Group).
Winni Cheuk, Head of Sales, Public Distribution APAC, UBS Global Markets said:
“The listing of UBS’s trade paper reinforces the bank’s position as the leading issuer of derivatives in Hong Kong1. Built natively on a public blockchain in a permissioned environment, this innovative product enhances transparency, reduces transaction fees, simplifies settlement processes and enables more flexible trading hours.
In general, the key features and benefits of guaranteed warranties include:
- Accessibility: Tokenization opens a new channel of investor access to digitally structured products. Blockchain technology enables better accessibility (using a compatible platform) and extends trading hours.
- Efficiency: Tokenized Warrants use smart contracts that enable automation, streamlining of trading and administrative processes, lower management costs, making them more efficient than traditional channels.
- Transparency: Blockchain technology provides transparency as all transactions and ownership records can be stored in a decentralized ledger.
This discretionary warrant is part of UBS’s ongoing effort to further develop its token services. Since 2015, UBS has been at the forefront of blockchain technology and digital assets. UBS is exploring various digital asset opportunities with a focus on developing institutional-grade infrastructure for tokenized assets.
UBS Tokenize is part of UBS’s ongoing work in tokenization services and global distributed ledger technology. It supports opportunities across origination, distribution and custody, with an initial focus on contributing bonds, equity and structured products. In 2022, the bank issued the first US$50 million fixed-rate note sold to Asia-Pacific clients through the UBS Tokenize platform.