- The system operates on a private blockchain network accessible to selected clients.
- It uses smart contracts to automate payments.
Swiss banking giant UBS piloted a blockchain-based payment solution seeking to improve cross-border transactions. The trial, UBS Digital Cash, is part of the bank’s strategy to enhance transparency and speed in international payments, Reuters reported. It reportedly aims to modernize traditional banking processes.
UBS conducted the pilot with several multinational clients, handling both domestic and cross-border payments in multiple currencies, including US dollars, Swiss francs, euros, and Chinese yuan.
The test reportedly represents a major step in the bank’s initiative to leverage blockchain technology to streamline payment operations. The UBS Digital Cash system operates on a private blockchain network accessible only to selected, permissioned clients.
This controlled access aims to ensure security and maintain compliance while offering an innovative payment solution. The system uses smart contracts, allowing payments to be settled automatically when predefined conditions are met. This automation is designed to enhance the speed and transparency of transactions, reducing the need for manual processing and lowering operational risks.
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UBS Digital Cash
A significant feature of the UBS Digital Cash system is its potential to transform liquidity management for corporate clients. During the pilot, UBS facilitated liquidity transfer between its branches, highlighting the platform’s capability to optimize cash flow.
The bank explained that with increased visibility of their cash positions, firms can better manage intraday liquidity and adjust their buffers, ultimately improving financial control. UBS plans to continue expanding the capabilities of UBS Digital Cash, with future developments likely including enhancements to support a broader range of currencies and an extended network of clients.
By integrating a private blockchain network with automated settlement processes, UBS hopes to reduce transaction times, cut costs, and offer multinational clients a better experience.
