Swiss Banks Complete First Blockchain-Based Payment
Some of Switzerland’s largest banks have completed a groundbreaking proof-of-concept (PoC) that tested blockchain technology for interbank payments. UBS, Sygnum Bank, and PostFinance, under the Swiss Bankers Association (SBA), say this marks the first legally binding bank payment executed via a public blockchain.
How the Test Worked
The project used tokenized payment instructions, known as “deposit tokens,” to initiate an offchain fiat transfer. The first use case executed a payment between customers of the participating banks. The second scenario tested an escrow-like process that exchanged deposit tokens for tokenized real-world assets (RWAs) with automated settlement.
The SBA emphasized that the system’s smart contracts ensured verifiable processes, regulatory compliance, and technical security.
Challenges and Future Potential
While the test proved the feasibility of blockchain-based payments, the SBA noted scalability remains a challenge. More cooperation between banks, infrastructure providers, and regulators is needed before large-scale adoption can occur.
Christoph Puhr, digital assets lead at UBS Group, said the PoC “demonstrates that interoperability of bank money via public blockchains can become a reality, enabling innovation around tokenized assets.”
Global Implications
The study adds momentum to global experiments in blockchain payments. In the US, the Federal Reserve Bank of New York and the BIS Innovation Hub recently tested smart contract toolkits, finding them flexible and quick to adapt in tokenized financial systems.
As banks worldwide explore blockchain infrastructure, Switzerland’s successful PoC could accelerate the integration of traditional finance with decentralized technologies.
