Swiss lender UBS has announced a pilot of its blockchain-based payment solution, UBS Digital Cash to improve the efficiency and transparency.
UBS said the pilot included successful transactions with multinational clients and banks, covering domestic payments within Switzerland and cross-border transactions in various currencies.
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UBS Digital Cash utilises a private blockchain network accessible only to permissioned clients.
Settlements on this network are performed through smart contracts, which can automatically execute payments when certain conditions are met.
This allows client transfers at UBS to be recorded and processed in a digital system for transaction recording, independent of currency, in near “real-time and around the clock”.
The UBS Digital Cash system is intended to address the delays often associated with cross-border payments, which can lead to a fragmented view of liquidity positions for companies, the bank noted.
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By GlobalDataBy leveraging blockchain technology, UBS aims to facilitate timely payment processing, increase transparency and security, and enable companies to manage intraday liquidity and adjust liquidity buffers more effectively.
During the pilot, UBS Digital Cash demonstrated its capability to handle transactions in US dollars, Swiss francs, Euros, and Chinese yuan.
It also facilitated the transfer of liquidity between different UBS entities.
The bank plans to further develop and expand its UBS Digital Cash offering in subsequent phases.
UBS institutional and multinational banking head Andy Kollegger said: “UBS Digital Cash going forward aims to enable our clients to make cross-border payments in a much more efficient and transparent way.
“Blockchain-based payment solutions for cross-border payments are a strategic focus for UBS. With the successful UBS Digital Cash pilot, we have reached another important milestone.”
The initiative complements UBS’s participation in several market projects, including the Swiss National Bank’s project Helvetia, which explores real wholesale Swiss franc Central Bank Digital Currency, and the Agorá project led by the Bank for International Settlements along with seven central banks, aimed at unlocking central bank money and tokenised deposits from commercial banks for cross-border payments.
