Highlights:
- To enhance cross-border payment efficiency for corporate clients, UBS has piloted a blockchain-based system known as UBS Digital Cash.
- The pilot comprised trade transactions across multiple currencies on a private blockchain network accessible to authorized clients.
- UBS Digital Cash is also set to be expanded for payments globally via smart contracts for improved transparency and real-time settlement.
Swiss banking giant UBS has successfully piloted UBS Digital Cash. The payment solution, based on blockchain, is meant to optimize the flow of cross-border transactions. Multinational clients and banks participated in the pilot, which covered domestic payments in Switzerland and international transfers in U.S. dollars, euros, Swiss francs and Chinese yuan. Furthermore, the pilot involved liquidity transfers between various UBS entities, demonstrating the system’s versatility.
Advertisement
According to the press release, UBS Digital Cash aims to enhance transparency and security in cross-border payments. It runs on a private blockchain network that only authorized clients can access. Furthermore, Settlement happens via smart contracts, which automatically execute payments once certain conditions are met.
🚀 @UBS successfully pilots #UBSDigitalCash, a #blockchain-based solution for #crossborderpayments in #USD, #CHF, #EUR, and #CNY.
This innovative #platform enhances #transparency and #efficiency in #globaltransactions.Details below👇🔗https://t.co/iTSJvqTMsH pic.twitter.com/z1FCjX9N0y
— Unlock Blockchain (@unlockbc) November 7, 2024
Consequently, this technology allows clients to effectively manage their intraday liquidity. With greater visibility of their total cash positions, they can adjust liquidity buffers. The system also allows for real-time transaction processing and recording. It is currency-independent and available around the clock.
Focus on Blockchain Solutions in the Context of Strategic Management
UBS Head of Institutional & Multinational Banking Andy Kollegger said this is a strategic focus for UBS. Cross-border payments are given priority for blockchain-based payment solutions. “UBS Digital Cash is going to allow our clients to make cross-border payments in a much more efficient and transparent way,” he stated.
Moreover, UBS intends to extend and diversify UBS Digital Cash. This will improve real-time settlement and the programmability of money movements for corporate and institutional clients.
Janko Hahn, Head of Treasury Operations at Autoneum, one of the pilot participants, highlighted the advantages of the system. “With UBS Digital Cash, cross-border transactions are faster and fully traced. It’s a huge benefit when working in a global environment,” he commented.
Commitment to Blockchain Innovation
This initiative is part of UBS’s participation in different market projects. Project Helvetia, the Swiss National Bank’s project for wholesale central bank digital currency, is among them. Furthermore, the Bank for International Settlements’ Agorá project is involved.
They also show UBS’s intent to use the power of blockchain technology. Their objective is to simplify global transactions in finance. Furthermore, UBS has already issued a blockchain-powered bond and opened a tokenized investment fund, illuminating its leadership in digital asset innovation.
Ethereum-Based Money Market Fund
Recently, UBS Asset Management launched its first tokenized fund on the Ethereum blockchain. The fund, named UBS USD Money Market Investment Fund Token (uMINT), offers a secure and efficient way to manage cash. It is designed for clients in Singapore and distributed through authorized distribution partners.
JUST IN – Switzerland's largest bank UBS has launched the world's first Ethereum-based tokenized fund. pic.twitter.com/c7c6S5gIoA
— Altcoin Daily (@AltcoinDailyio) November 2, 2024
Thomas Kaegi, co-head of UBS Asset Management Asia-Pacific, also mentioned the growing demand for tokenized investments. Interest across multiple asset classes is starting to pick up, he said. To do this, UBS is looking to expand its digital services using both public and private blockchain networks.
UBS invests in markets related to digital finance in Asia via uMINT. Using blockchain, it aims to offer investors high-quality money market products for transparency and efficiency. This strategy aligns with the trend of using technology in the region, as UBS combines traditional financial methods with modern technology in its blockchain projects.
Advertisement
