UBS has unveiled Hong Kong’s first investment-grade tokenized warrant on the Ethereum public blockchain network. This pioneering product, utilizing UBS Tokenize – the bank’s in-house tokenization service, represents a call warrant with Xiaomi Corporation as the underlying stock. The tokenized warrant, a first-of-its-kind natively issued on a public blockchain, was successfully acquired by OSL Digital Securities Limited, a licensed virtual asset platform operator and subsidiary of OSL Group.
UBS Tokenized Warrant Reinforces Derivative Product Leadership
Winni Cheuk, Head of Sales, APAC Public Distribution at UBS Global Markets, emphasized the significance of the UBS tokenized warrant in solidifying the bank’s position as a premier issuer of derivative products in Hong Kong. Developed within a permissioned environment on a public blockchain, the innovative product brings enhanced transparency, reduced transaction fees, streamlined settlement processes, and trading flexibility.
OSL Group’s CEO Commends Collaboration Milestone
Patrick Pan, Chairman and Chief Executive Officer at OSL Group, expressed pride in collaborating with UBS on the tokenized warrant, simulating the entire product life cycle of an equity-linked structured product token. The transaction, spanning from token minting to simulated secondary market transactions and token burning at maturity, marks a significant achievement in Hong Kong’s regulated virtual asset landscape.
Features and Benefits of Tokenized Warrants
The tokenized warrant introduces several key features and benefits, including improved accessibility through blockchain technology, facilitating better access to digital structured products and extended trading hours. Smart contracts play a crucial role in automating processes, streamlining trading and administrative tasks, and reducing handling costs, contributing to enhanced efficiency compared to traditional channels. Blockchain technology ensures transparent and secure storage of all transactions and ownership records on a decentralized ledger.
UBS’s Ongoing Commitment to Tokenization Services
This tokenized warrant is part of UBS’s continuous efforts to advance its tokenization services. Since 2015, the bank has been a pioneer in blockchain technology and digital assets, exploring opportunities with a focus on developing institutional-grade infrastructure for tokenized assets. UBS Tokenize, an integral component of the bank’s broader work in tokenization services and global distributed ledger technology, supports opportunities across origination, distribution, and custody, with a primary focus on tokenizing bonds, funds, and structured products. In 2022, UBS achieved a milestone by issuing the first-ever USD 50 million tokenized fixed-rate note, catering to Asia Pacific clients through the UBS Tokenize platform.