Swiss bank UBS has successfully piloted a blockchain-based payment solution it has developed to improve the efficiency of cross-border transactions.

The new solution, called UBS Digital Cash, aims to enable the bank's clients to make cross-border payments in a more efficient and transparent way.

“UBS Digital Cash going forward aims to enable our clients to make cross-border payments in a much more efficient and transparent way," said Andy Kollegger, head of UBS Institutional & Multinational Banking. “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."

In the pilot, transactions were carried out with multinational clients and banks, including domestic transactions in Switzerland and cross-border payments in US dollars, Swiss francs, euros, and Chinese yuan. The pilot also included the transfer of liquidity between various UBS companies.

“The UBS Digital Cash pilot showcased the key advantages of blockchain-based payment solutions," said Janko Hahn, head of Treasury Operations at Autoneum, a participant in the pilot. “They make cross-border transactions faster, on time, and provide a seamless traceability, which is a huge benefit when operating in a global market."

UBS plans to expand and develop UBS Digital Cash in further steps. The system uses a private blockchain network to which only permissioned clients have access. Settlement occurs via smart contracts that can automatically execute payments once certain conditions are met.

“We see the interoperability between UBS Digital Cash and other digital cash initiatives as key for the financial industry," said Xiaonan Zou, UBS head of Digital Assets, Group Treasury. “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."

UBS Digital Cash complements the bank's involvement in other blockchain and central bank digital currency initiatives, including the Swiss National Bank-led project Helvetia and the Agora project led by the bank for international settlements.

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