UBS Pilots Blockchain-Based Solution for Faster Cross-Border Payments

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Veronika Rinecker

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Blockchain-based payments

Swiss bank UBS has successfully tested its new blockchain-based payment system, known as UBS Digital Cash.

The new solution was developed to improve the efficiency and security of cross-border payments for corporate and institutional clients, according to the bank’s press release from Nov. 7.

Based on a Private Blockchain

UBS Digital Cash allows for almost instant processing of international payments, reducing delays and minimizing errors.

To process payments, UBS Digital Cash uses a private blockchain network accessible only to authorized clients. Payments are automatically executed through self-executing smart contracts as soon as specific conditions are met.

UBS transfers are recorded and processed digitally in real-time, 24/7, regardless of currency.

During the pilot phase, UBS conducted transactions with multinational clients and other banks.

These included domestic transactions within Switzerland and cross-border payments in U.S. dollars, Swiss francs, euros, and Chinese yuan.

​​In addition, the pilot included the transfer of liquidity between various UBS companies.

UBS also plans to expand further and develop its UBS Digital Cash offering.

Blockchain Boosts Cross-Border Payments

Janko Hahn, Head of Treasury Operations at Autoneum, who participated in the pilot project, is quoted as saying that the pilot demonstrated that the blockchain-based payment solutions can make cross-border transactions “faster, on time and provide a seamless traceability, which is a huge benefit when operating in a global market.”

UBS views its new payment solution as part of a broader range of digital cash initiatives.

Xiaonan Zou, UBS Head Digital Assets, Group Treasury, added:

”We see the interoperability between UBS Digital Cash and other digital cash initiatives as key for the financial industry. In addition to their role in correspondent banking, they also have the potential to streamline and simplify the settlement of tokenized assets in the capital market.”

Driving Innovation in Digital Assets

Headquartered in Zurich, UBS is a leading full-service bank in Switzerland. With the acquisition of Credit Suisse in 2023, UBS has assets under management of $5.7 trillion.

UBS Digital Cash is part of a broader range of initiatives in which UBS is involved. These include the Helvetia project, led by the Swiss National Bank, for real wholesale Swiss franc central bank digital currency (wCBDC), and the Agorá project, led by the Bank for International Settlements (BIS) together with seven central banks.

All these initiatives aim to open up central bank money and tokenized deposits from commercial banks in the context of cross-border payments.

Earlier this week, UBS Asset Management, the bank’s global investment manager, in partnership with Swift and Chainlink, successfully completed another pilot that enables the settlement of tokenized fund subscriptions and redemptions using the Swift network.

This pilot was part of the Monetary Authority of Singapore’s (MAS) project Guardian, which aims to explore the potential of digital assets in financial markets.

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