UBS has successfully piloted a blockchain-based payment system known as UBS Digital Cash, aimed at enhancing the speed and efficiency of cross-border transactions for corporate and institutional clients.
In the pilot program, UBS carried out transactions with multinational clients and banks, which included domestic transactions within Switzerland and cross-border payments in US dollars, Swiss francs, euros, and Chinese yuan. The pilot also facilitated liquidity transfers between various UBS entities.
A primary goal of this initiative is to improve the visibility of liquidity positions for corporate clients. Often, these positions can be unclear due to delays in settlement times. With UBS Digital Cash, the bank aims to enable companies to manage their intraday liquidity more effectively and adjust liquidity buffers on their accounts with greater ease, thanks to enhanced transparency of their total cash positions.
Andy Kollegger, head of UBS Institutional & Multinational Banking, commented, “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 payment process utilizes a private blockchain network, accessible only to authorized clients. Settlements are conducted through smart contracts, which can automatically execute payments once specified conditions are met. Client transfers at UBS are logged and processed in a digital transaction recording system that operates independently of currency, in real time, and continuously.
Xiaonan Zou, UBS head of digital assets in Group Treasury, emphasized the importance of interoperability between UBS Digital Cash and other digital cash initiatives in the financial industry. He noted that these solutions not only play a role in correspondent banking but also have the potential to streamline and simplify the settlement of tokenized assets in the capital market.