UBS launches Digital Cash, a blockchain-based solution to improve cross-border payments, enhance transparency, and simplify liquidity management for institutions.
UBS has successfully launched its new blockchain-based payment solution, UBS Digital Cash. This initiative enhances cross-border payments’ efficiency, transparency, and programmability for corporate and institutional clients. Through blockchain, UBS seeks to overcome some challenges, including delayed settlement times and poor liquidity management by various businesses.
Conventional cross-border payment operations cause problems with segmented positions and long settlement cycles. UBS Digital Cash addresses these problems by creating a more transparent and secure payment system. This enables companies to track their liquidity positions more effectively, tweak their buffers, and accelerate payments.
Andy Kollegger, the Head of UBS Institutional & Multinational Banking, pointed out the solution’s ability to revolutionize cross-border payments. He said that through UBS Digital Cash, such transactions would be more efficient and transparent, a milestone in the bank’s strategic direction of leveraging a blockchain payment system.
UBS Expands Digital Cash Pilot with Global Clients and Multi-Currency Transactions
In the pilot, UBS made domestic and cross-border transactions in US dollars, Swiss francs, Euros, and Chinese Yuan. The tests included global clients and numerous forms of UBS companies to demonstrate the solution’s flexibility. UBS intends to continue with this success and extend its Digital Cash product.
Janko Hahn, the Head of Treasury Operations at Autoneum, said the pilot showed how blockchain’s principle benefits work in cross-border payment. He underlined advantages such as every transaction being faster, on time, and fully traceable, which is essential nowadays in the global economy.
Xiaonan Zou, Head of UBS Digital Assets, also discussed how UBS Digital Cash can have many applications. He pointed to its compatibility with other digital cash experiments, especially in acting as a correspondent bank and trading tokenized assets in financial markets. This could help significantly simplify and fast-track the settlement process.
UBS Digital Cash is based on a private blockchain that is only available to selected bank partners. Payment is made through smart contracts, which means that once certain conditions have been met, the payment is made automatically. Documents are created electronically, meaning an immediate exchange occurs irrespective of the currency involved.
UBS’s Digital Cash project is part of its broader engagement in key market initiatives, including the Swiss National Bank’s Helvetia project for wholesale Swiss franc Central Bank Digital Currency (wCBDC). Additionally, UBS is involved in the BIS-led Agorá project, which seeks to simplify cross-border payments through tokenized deposits.
