UBS Hong Kong, in collaboration with crypto exchange OSL, has successfully tokenized an investment warrant on the Ethereum blockchain. The tokenized product, an options call warrant linked to Chinese tech giant Xiaomi, was sold to OSL Exchange after its creation on the Ethereum network. This pilot project successfully simulated the entire lifecycle of a tokenized warrant, from minting to settlement, demonstrating the practical potential of the technology.
Both UBS and OSL emphasized the numerous benefits of tokenization, including increased accessibility for investors through new channels to access structured products, enhanced efficiency through automated processes enabled by smart contracts, and improved transparency leveraging the blockchain’s immutable ledger.
This initiative builds upon UBS’s sustained research and exploration of tokenization since 2015, following previous issuances of tokenized notes. OSL, a key player in the cryptocurrency space, is also actively exploring tokenization options, showcasing its commitment to innovation and expansion into retail fund products through its “Fund Token” initiative.
Head of Sales of UBS Global Markets for APAC Public Distribution, Winni Cheuk, 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.”