UBS Hong Kong, in partnership with crypto exchange OSL, has achieved a milestone by tokenizing an investment warrant on the Ethereum blockchain. The tokenized product, an options call warrant linked to the renowned Chinese tech giant Xiaomi, was successfully sold to OSL Exchange following its creation on the Ethereum network. This groundbreaking pilot project meticulously simulated the entire lifecycle of a tokenized warrant, from its initial minting to final settlement, showcasing the tangible potential of blockchain technology in real-world financial applications.
Both UBS and OSL underscored the manifold advantages of tokenization in this venture. These include expanded accessibility for investors through novel avenues to engage with structured products, heightened operational efficiency via automated processes facilitated by smart contracts, and augmented transparency leveraging the blockchain’s immutable ledger.
This initiative marks a significant stride forward and builds upon UBS’s extensive research and exploration of tokenization since 2015, which notably includes prior issuances of tokenized notes. OSL, a prominent player in the cryptocurrency landscape, is actively exploring tokenization options as part of its broader strategic vision, exemplified by its “Fund Token” initiative aimed at retail fund products.
Winni Cheuk, Head of Sales of UBS Global Markets for APAC Public Distribution, remarked on the occasion:
“The introduction of the UBS tokenized warrant reinforces the bank’s position as the leading derivative products issuer in Hong Kong. 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.”
