UBS AG announced today the launch of Hong Kong’s first-ever investment-grade tokenized warrant on the Ethereum public blockchain network.
This innovative product utilizes the on-chain issuance product framework offered by UBS Tokenize, the bank’s in-house tokenization service.
The product is a call warrant with Xiaomi Corporation as the underlying stock. The tokenized warrant is also the first natively issued warrant on a public blockchain that was sold to OSL Digital Securities Limited, a licensed virtual asset platform operator and wholly-owned subsidiary of OSL Group (formerly BC Technology Group).
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 Kong1. 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.”
In general, tokenized warrants’ key features and benefits would include:
- Accessibility: Tokenization opens a new channel for investors to access digital structured products. Blockchain technology enables better accessibility (using a compatible platform) and extends trading hours.
- Efficiency: Tokenized warrants utilize smart contracts that allow automation, streamline trading and administrative processes, lower handling costs, making it more efficient than traditional channels.
- Transparency: Blockchain technology provides transparency as all transactions and ownership records can be stored on a decentralized ledger.
This tokenized warrant is part of UBS’s ongoing effort to develop its tokenization services further. Since 2015, UBS has been at the cutting edge of blockchain technology and digital assets. UBS explores various digital asset opportunities with a focus on developing institutional grade infrastructure for tokenized assets.
UBS Tokenize is part of UBS’ ongoing work in tokenization services and global distributed ledger technology. It supports opportunities across origination, distribution, and custody, initially focusing on tokenization of bonds, funds, and structured products. In 2022, the bank issued the first ever USD 50 million tokenized fixed rate note sold to Asia Pacific clients through the UBS Tokenize platform.