by 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 adoption of blockchain by other institutions might be prompted by UBS’s success.
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.
How UBS Digital Cash Operates
The Digital Cash system, according to UBS, makes use of a private blockchain network that is only open to clients with permission.
Payments are automated by smart contracts, which also carry out transactions when certain requirements are met. According to the bank, all client transfers, regardless of currency, are tracked and handled instantly within UBS.
UBS’s continued engagement in the blockchain sector is strengthened by this project. A record-breaking blockchain bond worth 375 million Swiss francs ($410 million) was issued by the bank on the SIX Digital Exchange in November 2023.
It just revealed its first tokenized investment fund, a Money Market investment platform based on the Ethereum distributed ledger.
As blockchain applications become more and more relevant, other top financial institutions, such as JPMorgan Chase, have followed suit with blockchain-based banking through its blockchain business, Onyx. Six Indian banks are apparently participating in a trial program that will allow blockchain-enabled transactions.
