UBS and ZKB test fund transactions via a blockchain
In cooperation with UBS, Zurich Cantonal Bank (ZKB) has for the first time replaced blockchain-based instructions for the drawing and withdrawal of fund shares for its customers. Both Swiss banking giants want to position themselves as a pioneer with the step.
Specifically, the ZKB has sent orders to the drawing of UBS fund shares on the blockchain solution of Fundsdlt, a subsidiary of Deutsche Börse AG, to UBS. UBS, in turn, provided the information on transaction progress and success through the Blockchain of the Zurich cantonal bank, as can be seen from a media release. According to your own website set Fundsdlt on quorum, a private “enterprise blockchain” with access restrictions.
Fund transactions via a blockchain
Blockchain technology enables financial institutions to make their processes more efficient, according to ZKB. Unlike in securities, in which striking efficiency gains have been realized in recent years, there are even further potential for this in the area of the funds. The findings of this pilot project are accordingly important. Thanks to the use of Distributed-Ledger technology (DLT) will ensure immediate data availability in real time via the current status of orders in the fund context. In this way, higher transparency is promoted via fund orders.
“The use of the blockchain should enable our customers to process even more efficient in the future. Blockchain technology can offer added value in the future. These transactions show our competence in this area and represent a next milestone in the use of future-oriented technologies, which further strengthens Zurich cantonal bank with the participation in different initiatives.” – Peter Hubli, Head of Digital Asset Solutions at Zurich's Kantonalbank
The media release also says that the Swiss financial center takes on a pioneering role in the technological development; And the possible uses of blockchain technology would be more and more relevant in the financial industry. The latest transactions are one of several initiatives with which Zurich Cantonal Bank explores the numerous possible uses of DLT technology. Among other things, the bank has Project Helvetia III of the Swiss National Bank Several issuers supported in the output of digital bonds. In particular, the Zurich Cantonal Bank has been offering since September 2024 Your customers as well as third banks also trade and the custody of selected cryptocurrencies an.
UBS: innovation or marketing?
At the business partner UBS, the balance in the crypto area looks a little different. In communications to customers Warned the Swiss Mega-Bank over the years before the “valuelessness, volatility and regulatory uncertainty” of the bitcoin. Accounts of customers with touching the crypto industry are according to numerous Anecdotes frozen and closed. Small investors even prevent the bank with the US-based Bitcoin and Ethereum ETFs.
At the same time, UBS would like to sell itself as a blockchain pioneer. However, it must be clearly differentiated between public blockchains – such as Bitcoin and Ethereum – and private “DLT” systems. Public blockchains offer decisive advantages such as decentralization, transparency and security through a distributed network of nodewhich eliminates individual default points (English = single point of failures). In contrast, private blockchains limit access to a controlled group of participants and are operated by a central party. The increased security, transparency and trustworthiness is completely lost. So it seems that UBS has not recognized the actual advantage of blockchain technology. Neither the UBS nor the ZKB reacted immediately to a request from cvj.ch on the topic.
