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Swiss banking giant UBS said on Thursday that it has successfully tested a blockchain-based payment platform called UBS Digital Cash.
In a press statement, the bank stated the platform was designed to enhance the efficiency and transparency of international financial transactions.
The pilot program, conducted in collaboration with multinational corporations and financial institutions, included both domestic transactions within Switzerland and international payments in major currencies such as the U.S. dollar, euro, Swiss franc, and Chinese yuan.
How the UBS Digital Cash Works
According to UBS, the Digital Cash system uses a private blockchain network that’s accessible only to authorized clients.
Smart contracts automate the payment process and execute transactions upon meeting specific conditions. Client transfers within UBS are recorded and processed in real-time, regardless of currency, the bank said.
This initiative builds on UBS’s ongoing involvement in the blockchain industry. In November 2023, the bank issued a record-breaking 375 million Swiss franc ($410 million) blockchain bond on the SIX Digital Exchange.
More recently, it announced its first tokenized investment fund, a Money Market investment built on an Ethereum distributed ledger.
As blockchain use cases gather relevance, other leading financial institutions like JPMorgan Chase, through its blockchain group, Onyx have toed the path of blockchain-based banking. The bank is reportedly involved in a pilot program that would enable blockchain-enabled transactions among six banks in India.
