Key Takeaways
- To expedite international transactions, UBS has tested UBS Digital Cash, a blockchain-based payment system.
- Authorized clients can access a private blockchain where the technology facilitates real-time, multi-currency payments.
- The success of UBS may encourage other banks to adopt blockchain.
The massive Swiss bank UBS announced on Thursday that it has successfully tested UBS Digital Cash, a blockchain-based payment system.
The platform was created to improve the effectiveness and transparency of global financial transactions, the bank said in a press release.
Both internal transactions within Switzerland and international payments in major currencies like the US dollar, euro, Swiss franc, and Chinese yuan were part of the pilot program, which was carried out in partnership with multinational enterprises and financial institutions.
The Operation of UBS Digital Cash
UBS claims that the Digital Cash system makes use of a private blockchain network that is only open to clients with permission.
When certain requirements are met, smart contracts carry out transactions and automate the payment process. Regardless of currency, UBS records and processes client transfers in real-time, according to the bank.
This project expands on UBS’s previous engagement in the blockchain sector. The bank released a blockchain bond worth a record-breaking 375 million Swiss franc ($410 million) on the SIX Digital Exchange in November 2023.
The first tokenized investment fund, a Money Market investment based on an Ethereum distributed ledger, was recently disclosed.
Other prominent financial organizations, such as JPMorgan Chase, have followed the lead of blockchain-based banking through its blockchain business, Onyx, as blockchain use cases gain traction. According to reports, the bank is a part of a trial initiative that will allow six Indian banks to conduct blockchain-enabled transactions.
