UBS HK Tokenized Investment Warrant Product on Ethereum

Reported by Cointelegraph, Swiss multinational bank UBS’ Hong Kong subsidiary has tokenized an investment warrant on the Ethereum blockchain together with cryptocurrency exchange OSL.

According to the Feb. 7 announcement, the tokenized product is an options call warrant with Chinese smartphone giant Xiaomi Corporation as the underlying stock. After tokenization, the digital asset was then sold to the OSL Exchange.

“We are simulating the whole product life cycle of an equity-linked structured product token, from token mint, through simulated secondary market transactions, and finally to token burn at maturity,” OSL CEO Patrick Pan commented. Meanwhile, Winni Cheuk, head of sales at UBS Global Markets, said the novel product “enhances transparency, reduces transaction fees, streamlines settlement processes, and allows for more flexible trading hours.”

UBS wrote that the tokenization of financial derivatives has several notable advantages, namely creating new accessibility channels, increasing efficiency and providing transparency via the immutable blockchain ledger. “Tokenized warrants utilize smart contracts that allow automation, streamline trading and administrative processes, [and] lower handling costs,” the announcement noted.