UBS Partners with OSL to Tokenize Investment Warrant on Ethereum Blockchain
Summary:
UBS' Hong Kong arm has partnered with cryptocurrency exchange OSL to tokenize an investment warrant on the Ethereum blockchain, with Xiaomi Corporation as the underlying stock option. The move, which follows UBS' ongoing research into asset tokenization since 2015, enhances transparency, streamlines settlement, and offers more adaptable trading periods. UBS previously issued tokenized fixed-rate notes and digital structured notes worth millions in the Asia-Pacific region.
The Hong Kong branch of UBS, a Swiss international banking corporation, has collaborated with OSL, a cryptocurrency exchange, to tokenize an investment warrant on the Ethereum blockchain. The news, announced on February 7th, stated that the newly tokenized product becomes a call warrant option for Xiaomi Corporation, a prominent Chinese smartphone company. After being tokenized, this digital asset was subsequently traded to OSL Exchange. "We're testing an entire lifecycle of an equity-linked product token, starting from its creation, through hypothetical secondary market transactions, and finally culminating in token destruction upon maturity," stated OSL CEO, Patrick Pan.
Reflecting on the introduction of this unique product, Winni Cheuk, who heads the sales department at UBS Global Markets, mentioned that it promotes transparency, lowers transaction costs, simplifies settlement procedures, and allows more adaptable trading periods.
UBS software engineers highlighted various benefits of financial derivatives tokenization such as creating new access paths, enhancing efficiency, and offering transparency through the unchangeable blockchain ledger. They explained, "Smart contracts used in tokenized warrants enable automation, provide simpler trading and administrative procedures, and reduce operational costs."
Since 2015, UBS has been studying asset tokenization. In 2022, the firm issued a $50 million tokenized fixed-rate note to its Asia-Pacific clients through their UBS Tokenize platform. Furthermore, UBS assisted in issuing 200 million Chinese yuan ($28 million) worth of digital structured notes on the Ethereum blockchain in Hong Kong on June 12, 2023. In an interview with Cointelegraph last month, OSL CEO, Patrick Pan, announced that they are currently examining a Fund Token project for tokenizing retail fund products. The new development closely follows UBS' earlier move where they launched a tokenized money market fund on Ethereum.
Published At
2/7/2024 8:30:00 PM
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