Swiss banks reach milestone: Deposit token makes blockchain-based payments fit for the future
A first for the Swiss financial centre: the Swiss Bankers Association (SBA), PostFinance, Sygnum and UBS are enabling legally compliant payments with digitised bank deposits via a public blockchain. Their report on the Deposit Token feasibility study marks a milestone for the financial centre.
Social bookmarks
Tokenised bank deposits as the key to the modern financial world
Today's payment transactions are fast and efficient, but they are reaching their limits with new digital business models. The Deposit Token vision provides a remedy: it brings bank deposits onto the blockchain and enables payments around the clock, seamlessly integrated into digital processes and fully automatable.
For Martin Hess, Chief Economist and Head of the SBA's Digital Currencies Project, this step marks a new era: ‘The tested token is a strategic step towards the future of the payment system and underlines the innovative capacity of the Swiss financial centre.’
Alexander Thoma, Head of Digital Assets at PostFinance, emphasises the practical benefits: ‘The Deposit Token offers great potential for making payment transactions more efficient and secure for all parties in the future. The feasibility study has shown that blockchain technology works for this and is legally viable.’
Programmable processes, known as smart contracts, ensure that payments are triggered automatically when specified conditions are met. This opens up new possibilities – from automated securities trading to transactions between machines in the ‘Internet of Things’.
Thomas Eichenberger, Deputy CEO of Sygnum, explains: ‘Blockchain technology will bring about lasting change to the financial market and payment system. We are demonstrating the potential of this technology using concrete implementation examples. The aim is to drive innovation and create long-term added value for the Swiss financial centre.’
UBS also sees great potential for the future. Christoph Puhr, Digital Assets Lead at UBS Group, says: ‘The PoC shows that the interoperability of bank money via public blockchains can become a reality. In this way, we are actively shaping the future of financial systems – both nationally and globally.’
The most important findings of the project
Two use cases were tested: payments between customers of different banks and an automated exchange of assets via a trust-like process. The result: the technology works, the payments are legally binding and ensure compliance with important regulatory requirements and depositor protection. This proves for the first time that the use of deposit tokens is possible across banks in a secure and transparent manner.
Outlook and next steps
The results report lays the foundation for a broader introduction and further development of the deposit token. For the next phase, additional adjustments to the deposit token model and increased cooperation with other banks and authorities are important. The aim is to make the advantages of blockchain-based payment methods available to Swiss bank customers.
The deposit token represents a shift towards a state-of-the-art, efficient and affordable financial infrastructure. With this project, Swiss banks are sending a clear signal: they are actively shaping the digital future and setting standards for innovation and cooperation in the financial market.