Hong Kong, 7 February 2024 – 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).

Commenting on this transaction, 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.”

“OSL is proud to be working with the team of blockchain and product experts at UBS. We are simulating the whole product life cycle of an equity-linked structured product token, from token mint, through simulated secondary market transactions, and finally to token burn at maturity. Hong Kong’s regulated virtual asset landscape has just crossed another major milestone with this Investment grade tokenized financial product issuance,” said Patrick Pan, Chairman and Chief Executive Officer at OSL Group.

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.

Click here to find out more about UBS Tokenize.

1 Source: HKEX data, #1 market share in 2021-2022 in terms of the net notional value of warrants and CBBCs sold.

About UBS

UBS is a leading and truly global wealth manager and the leading universal bank in Switzerland. It also provides diversified asset management solutions and focused investment banking capabilities. With the acquisition of Credit Suisse, UBS manages USD 5.7 trillion of invested assets as per fourth quarter 2023. UBS helps clients achieve their financial goals through personalized advice, solutions and products. Headquartered in Zurich, Switzerland, the firm is operating in more than 50 countries around the globe. UBS Group shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

Media contacts:

Yukmin Hui, Tel: 852 2971 8471/ +852 9258 6387; Yukmin.hui@ubs.com
Angel Yeung, Tel: +852 2971 6884/+852 9725 0297; angel.yeung@ubs.com

www.ubs.com/media