The Zurich Cantanol Bank (ZKB) has collaborated with UBS, headquartered in Zurich, to exchange instructions for the subscription and redemption of fund units via blockchain for the first time.
In this process, ZKB transmitted orders for the subscription of UBS fund units to UBS using the blockchain solution from FundsDLT, a subsidiary of Deutsche Börse AG, based in Frankfurt, Germany.
UBS then relayed information about the transaction’s progress and success back to ZKB via blockchain.
“The use of blockchain will enable us to offer our clients even more efficient processing in the future,”
says Peter Hubli, Head of Digital Asset Solutions at ZKB.
Hubli emphasises:
“Blockchain technology can offer added value in the future. These transactions demonstrate our expertise in this field and mark another milestone in the use of pioneering technologies, which ZKB continues to strengthen by participating in various initiatives.”
Blockchain technology allows financial institutions to make their processes more efficient.
Unlike securities settlement, where significant efficiency gains have been achieved in recent years, there is still further potential for improvement in the fund sector.
The insights gained from this pilot project are therefore particularly important.
By using Distributed Ledger Technology (DLT), immediate real-time data availability on the current status of orders in the fund context is ensured.
This, in turn, promotes greater transparency in fund transactions.
“Distributed ledger technologies represent a key area of innovation, particularly in the fund business,”
says Diana-Cezara Toader, Head of Digital Assets at UBS Asset Management.
“The pilot transaction has demonstrated that financial intermediaries in the fund sector can communicate in a new way using blockchain technology, thereby increasing operational efficiency. By testing such solutions in real-world operations, we strengthen our expertise and contribute to the development of viable applications. Collaborative efforts within the Swiss financial sector are essential for this advancement.”
Switzerland’s financial sector plays a pioneering role in technological advancements, and blockchain applications are becoming increasingly relevant within the industry.
The latest transactions are one of several initiatives through which ZKB is exploring the numerous applications of DLT technology to make them accessible to clients.
Among other efforts, the bank has supported multiple issuers in the issuance of digital bonds as part of the Swiss National Bank’s Helvetia III project.
Since September 2024, ZKB has also been offering its clients and third-party banks the trading and secure custody of selected cryptocurrencies.
Featured image credit: edited from
