UBS Launches Investment-Grade Tokenized Warrant on Ethereum Blockchain
UBS has introduced Hong Kong’s inaugural investment-grade tokenized warrant on the Ethereum public blockchain network. Leveraging the on-chain issuance product framework provided by UBS Tokenize, the bank’s in-house tokenization service, this groundbreaking product is a call warrant featuring Xiaomi Corporation as the underlying stock. Notably, the tokenized warrant marks the first natively issued warrant on a public blockchain and was successfully 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 at UBS Global Markets, highlighted the significance of the UBS tokenized warrant, reinforcing the bank’s position as a leading issuer of derivative products in Hong Kong. This innovative product, created natively on a public blockchain in a permissioned environment, brings enhanced transparency, reduced transaction fees, streamlined settlement processes, and flexibility in trading hours.
Patrick Pan, Chairman and Chief Executive Officer at OSL Group, expressed pride in collaborating with UBS, simulating the entire product life cycle of an equity-linked structured product token. From token minting through simulated secondary market transactions to token burning at maturity, the transaction represents a major milestone in Hong Kong’s regulated virtual asset landscape.
Key features and benefits of tokenized warrants include improved accessibility, leveraging blockchain technology for better access to digital structured products and extended trading hours. The utilization of smart contracts facilitates automation, streamlines trading and administrative processes, and lowers handling costs, contributing to increased efficiency compared to traditional channels. The transparency provided by blockchain technology ensures that all transactions and ownership records are securely stored on a decentralized ledger.
This tokenized warrant is part of UBS’s ongoing effort to advance its tokenization services. Since 2015, UBS has been at the forefront of blockchain technology and digital assets, exploring various opportunities with a focus on developing institutional-grade infrastructure for tokenized assets. UBS Tokenize, an integral part of UBS’s broader work in tokenization services and global distributed ledger technology, supports opportunities across origination, distribution, and custody, with an initial focus on tokenization of bonds, funds, and structured products. In 2022, the bank achieved another milestone by issuing the first-ever USD 50 million tokenized fixed-rate note, sold to Asia Pacific clients through the UBS Tokenize platform.
Image by pat pat from Unsplash
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