UBS, PostFinance and Sygnum Conduct Cross-Bank Payments on Ethereum
Swiss banking powerhouse UBS, crypto banking specialist Sygnum and PostFinance, a subsidiary firm of the state-owned Swiss Submit, efficiently examined funds between establishments on Ethereum, in response to a press launch on Tuesday.
The proof of idea, run beneath the Swiss Bankers Affiliation, noticed UBS, PostFinance, and Sygnum Financial institution perform transactions utilizing deposit tokens — digital representations of financial institution deposits that may transfer on a public blockchain.
The funds have been settled legally between banks with out counting on the standard cost system. The transactions have been performed on Ethereum utilizing a permissioned framework.
Switzerland already has an environment friendly home funds community, however conventional methods can’t deal with programmable circumstances or combine simply with blockchain-based markets, the businesses stated. With deposit tokens, transfers might sooner or later be processed immediately and tied to automated circumstances via good contracts.
For instance, a securities commerce might settle as quickly as possession is transferred, or an insurance coverage payout might set off as soon as a declare is validated.
The trial examined two use circumstances: peer-to-peer funds between clients of various banks and an escrow-like setup the place deposit tokens have been swapped for tokenized property.
Whereas the undertaking confirmed technical and authorized feasibility, scaling the system would require broader participation from banks, infrastructure suppliers and regulators. The Swiss Bankers Affiliation stated the work falls beneath its strategic precedence on digital currencies, however the pilot doesn’t imply deposit tokens shall be launched instantly.
