UBS launches Hong Kong’s first investment grade tokenized warrant

UBS launches Hong Kong’s first investment grade tokenized warrant

Swiss multinational bank UBS AG has strengthened its standing in blockchain and cryptocurrency via the launch of an investment grade tokenized warrant in Hong Kong.

The warrant is built on the Ethereum public blockchain network and utilises the on-chain issuance product framework offered by UBS Tokenize, the bank’s in-house tokenization service.

This marks the first ever Ethereum-based investment grade warrant in Hong Kong, as well as the first natively issued warrant on a public blockchain sold to OSL Digital Securities Ltd, a licenced virtual asset platform operator and part of the OSL Group. 

“OSL is proud to be working with the team of blockchain and product experts at UBS,” remarked Patrick Pan, Chairman and CEO of OSL Group.

“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. 

“Hong Kong’s regulated virtual asset landscape has just crossed another major milestone with this Investment grade tokenized financial product issuance.”

UBS has earmarked three main benefits to tokenized products, as it seeks to up its game in the space. 

These benefits are accessibility; opening channels of investors to access digital structured products; efficiency, via the utilisation of smart contracts for automation, streamlined trading and administrative processes and lower handling costs; and lastly, transparency, a commonly noted advantage of using blockchain products.

The launch forms part of UBS’ wider ambitions to develop institutional grade infrastructure for tokenized assets, with the company aiming to increase its use of global distributed ledger technology.

Blockchain technology has firmly established its place as a core feature of the global financial markets and the fintech sector, with regulators in the US and UK, among other major markets, seemingly becoming more accepting of digital currencies and assets.

Winni Cheuk, Head of Sales, APAC Public Distribution, UBS Global Markets, said, “The introduction of the UBS tokenized warrant reinforces the bank’s position as the leading derivative products issuer in Hong Kong. 

“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.”