On the Ethereum public blockchain network, UBS has released its first investment-grade tokenised warrant in Hong Kong. This modern offering takes advantage of UBS Tokenise on-chain issuance product platform, which is the bank’s internal the tokenisation service.
The product is a call warrant with Xiaomi Corporation serving as the underlying stock.
OSL Digital Securities Limited, a licensed virtual asset platform operator and subsidiary of OSL Group (previously BC Technology Group), purchased the tokenised warrant, which is also the first natively issued warrant on a public blockchain.
Tokenised warrants have the following major features and benefits:
- Accessibility: Tokenisation provides investors with a new way to access digital structured products. Blockchain technology improves accessibility (via a compatible platform) and increases trade hours.
- Efficiency: Tokenised warrants use smart contracts to automate, simplify, and reduce processing expenses, making them more effective than traditional channels.
- Transparency: Blockchain technology ensures transparency by storing every exchange and ownership data on a decentralised ledger.
This tokenised warrant is part of UBS’ ongoing efforts to expand its tokenisation services.
Since 2015, UBS has operated at the forefront of blockchain technology and digital assets, and investigates various digital asset potential, with a particular emphasis on building institutional-grade infrastructure for tokenised assets.
Furthermore, UBS Tokenise is an extension of UBS’ ongoing efforts in tokenisation services and worldwide distributed ledger technology.
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With an initial focus on tokenisation of bonds, funds, and structured products, it enables opportunities across origination, distribution, and custody.
The bank sold $50m tokenised fixed rate note to clients in Asia Pacific via the UBS Tokenise platform in 2022.
Commenting on the transaction, Winni Cheuk, head of sales, APAC Public Distribution, UBS Global Markets stated: “The introduction of the UBS tokenised 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.”
“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 tokenised financial product issuance,” added Patrick Pan, chairman and chief executive officer at OSL Group.