Three major Swiss banks—UBS, PostFinance, and Sygnum—have successfully completed a trial of tokenized deposits, marking a significant advancement in the evolution of banking technology. This initiative, which took place under the auspices of the Swiss Bankers Association, utilized the public Ethereum blockchain for its proof of concept (PoC), while the tokens employed were designed to facilitate off-chain conventional payments.
The motivation behind this trial stems from recognized gaps within the existing payment infrastructure, despite Switzerland boasting one of the most efficient systems globally. The participating banks have expressed a desire to harness the power of smart contracts to program payments, expanding the capabilities for transferring larger sums quickly and continuously.
During the trial, two key use cases were tested: interbank payments and an escrow mechanism for settling tokenized asset transactions. The findings from the trial demonstrated both the technical and legal viability of this innovative solution. Notably, from a legal standpoint, the trial established that to be considered a conventional payment, the token operates as a digital representation of a payment instruction, thereby bridging traditional finance with digital innovation.
Future iterations of the project aim to delve deeper into the potential for native digital deposit tokens, which could further revolutionize the banking landscape in Switzerland and beyond.
