UBS has developed and piloted a blockchain-based payment solution, dubbed UBS Digital Cash, to increase the efficiency, transparency, and programmability of money movements for corporate and institutional clients.
The solution is designed to address the delays and fragmentation often associated with cross-border payments, which can result in inaccurate liquidity positions for companies.
UBS Digital Cash aims to improve payment processing times and offer enhanced visibility of liquidity positions, enabling companies to manage intraday liquidity and adjust liquidity buffers more effectively.
The pilot phase involved successful transactions with multinational clients and banks, including both domestic transactions within Switzerland and cross-border payments in US dollars, Swiss francs, Euros, and Chinese yuan.
Additionally, liquidity transfers between various UBS companies were also part of the pilot.
UBS has outlined plans to further develop and expand its UBS Digital Cash offering.
The new solution operates on a private blockchain network, accessible only to permissioned clients. Payments are settled through smart contracts, which automatically execute transactions once predefined conditions are met.
Transactions are recorded and processed in a digital system, providing real-time, round-the-clock transaction processing across various currencies.
UBS Digital Cash complements UBS’s broader involvement in market initiatives, including the Swiss National Bank-led Helvetia project and the Agorá project.
UBS institutional and multinational banking head Andy Kollegger said: “UBS Digital Cash going forward aims to enable our clients to make cross-border payments in a much more efficient and transparent way.
“Blockchain-based payment solutions for cross-border payments are a strategic focus for UBS. With the successful UBS Digital Cash pilot, we have reached another important milestone.”
In August this year, UBS posted a 96% decline in its net profit to $1.14bn for the second quarter that ended 30 June 2024 (Q2 2024), compared to $27.33bn reported in the same quarter of 2023.
