UBS Hong Kong in partnership with OSL Exchange has tokenized an investment warrant on Ethereum blockchain.
In collaboration with the cryptocurrency exchange OSL, the Hong Kong unit of the Swiss multinational bank UBS Hong Kong has tokenized an investment warrant on the Ethereum blockchain.
The announcement made on February 7th stated that the tokenized commodity is an options call warrant with the Chinese smartphone giant Xiaomi Corporation as the underlying stock.
After generating the tokens, OSL Exchange purchased the digital asset. “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,” said OSL Chief Executive Officer Patrick Pan.
In the meantime, Winni Cheuk who is the head of sales at UBS Global Markets, stated that the innovative product “enhances transparency, reduces transaction fees, streamlines settlement processes, and allows for more flexible trading hours.”
Creating new accessible channels, enhancing efficiency, and offering transparency through the immutable blockchain ledger are some of the major advantages that the tokenization of financial derivatives offers, according to the engineers at UBS Hong Kong who wrote about the benefits of this technology.
“Tokenized warrants utilize smart contracts that allow automation, streamline trading and administrative processes, and lower handling costs,” according to the creators.
Since 2015, UBS has been doing ongoing research on the tokenization of assets. In 2022, UBS Hong Kong sold a tokenized fixed-rate note worth fifty million dollars to its Asia Pacific customers through the UBS Tokenize platform.
On June 12, 2023, UBS Hong Kong facilitated the issuance of digital structured notes worth a total of 28 million dollars, coined on the Ethereum blockchain in Hong Kong. The notes were worth 200 million Chinese yuan.
In a similar vein, Patrick Pan, the CEO of OSL, stated in an interview with the company is presently investigating the possibility of implementing a Fund Token initiative specifically for the tokenization of retail fund products.
