UBS Pilots Blockchain-Based ‘Digital Cash’ Solution to Revolutionize Cross-Border Payments
UBS, the Swiss banking giant, has successfully piloted UBS Digital Cash, a groundbreaking blockchain-based payment solution designed to revolutionize cross-border transactions. The initiative, announced on November 7, 2024, aims to address longstanding challenges in international payments, including delayed settlements and fragmented liquidity management.
The pilot demonstrated impressive versatility, successfully executing both domestic transactions within Switzerland and cross-border payments in multiple currencies, including US dollars, Swiss francs, euros, and Chinese yuan. The system also facilitated liquidity transfers between various UBS entities, showcasing its potential for comprehensive treasury management.
Andy Kollegger, Head of UBS Institutional & Multinational Banking, emphasized the strategic importance of this development: “UBS Digital Cash going forward aims to enable our clients to make cross-border payments in a much more efficient and transparent way.”
The technology operates on a private blockchain network with restricted access for authorized clients only. Smart contracts automate the settlement process, executing payments when predetermined conditions are met. This automation enables near real-time processing and round-the-clock operations, regardless of the currency involved.
Early adopters have already noted significant benefits. Janko Hahn, Head Treasury Operations at Autoneum, a pilot participant, highlighted the system’s advantages: “They make cross border transactions faster, on time and provide seamless traceability, which is a huge benefit when operating in a global market.”
The initiative aligns with UBS’s broader involvement in digital innovation, complementing its participation in the Swiss National Bank’s Project Helvetia for wholesale Swiss franc Central Bank Digital Currency (wCBDC) and the Bank for International Settlements’ Agorá project.
Looking ahead, Xiaonan Zou, UBS Head Digital Assets, Group Treasury, underscored the importance of interoperability: “We see the interoperability between UBS Digital Cash and other digital cash initiatives as key for the financial industry.” The bank plans to expand and develop the UBS Digital Cash offering further, potentially transforming how corporate clients manage their global treasury operations.
