UBS pilots new blockchain-based system for cross-border payments
Swiss bank UBS has successfully piloted a new system called UBS Digital Cash which, leveraging blockchain technology, is designed to simplify intraday-liquidity management for clients making cross-border payments.
UBS successfully pilots Digital Cash system
The system enables the settlement of international transactions using smart contracts on a private blockchain network.
UBS says that the pilot facilitated “domestic transactions within Switzerland and cross-border payments in US dollars, Swiss francs, Euros and Chinese yuan”, as well as the transfer of liquidity between “various UBS companies”.
Having tested the system among multinational clients and banks, UBS adds that it now intends to “expand and develop its UBS Digital Cash offering in further steps”.
Although the bank has not disclosed what these further steps are, Xiaonan Zou, its head of digital assets and group treasury, cites the combination of UBS Digital Cash with “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 tokenised assets in the capital market,” she explains.
With €1.554 trillion in total assets, UBS continues to test the potential of digital assets across various market initiatives. Back in 2021, the bank came together with the likes of Goldman Sachs, Citi and the Swiss National Bank to pilot cross-border transaction settlements with wholesale CBDCs.
More recently, last week, it collaborated with Swift and Chainlink to lead a pilot under the Monetary Authority of Singapore’s Project Guardian, using its asset management arm to settle tokenised fund subscriptions and redemptions using the Swift network.
