Cross-border payments often lead to delayed settlements. As a result, this creates a fragmented view of liquidity positions for companies. The aim is to increase transparency and security with blockchain-based payments via UBS Digital Cash which should in turn facilitate timely payment processing. In addition, companies should be able to manage intraday-liquidity and adjust liquidity buffers on their accounts more easily in the future, thanks to greater visibility of their total cash positions.

Andy Kollegger, Head UBS Institutional & Multinational Banking, says: ”UBS Digital Cash going forward aims to enable our clients to make cross-border payments in a much more efficient and transparent way.” emphasizing: "Blockchain-based payment solutions for cross-border payments are a strategic focus for UBS. With the successful UBS Digital Cash pilot, we have reached another important milestone.”

In the pilot, transactions with multinational clients and banks were successfully carried out, including domestic transactions within Switzerland and cross-border payments in US dollars, Swiss francs, Euros and Chinese yuan. In addition to that, the pilot also included the transfer of liquidity between various UBS companies. UBS plans to expand and develop its UBS Digital Cash offering in further steps.

Pilot participant Janko Hahn, Head Treasury Operations at Autoneum, says: “The UBS Digital Cash pilot showcased the key advantages of blockchain-based payment solutions. They make cross border transactions faster, on time and provide a seamless traceability, which is a huge benefit when operating in a global market.”

Xiaonan Zou, UBS Head Digital Assets, Group Treasury, adds: ”We see the interoperability between UBS Digital Cash and other digital cash initiatives as key for the financial industry. In addition to their role in correspondent banking, they also have the potential to streamline and simplify the settlement of tokenized assets in the capital market.”

How does UBS Digital Cash work?

For the payment process, UBS Digital Cash uses a private blockchain network to which only the permissioned clients have access. The settlement is performed via smart contracts, which, for example, automatically execute payments as soon as predefined conditions are met. Client transfers at UBS are recorded and processed in a digital system for recording transactions – independent of currency, practically in real time and around the clock. UBS Digital Cash complements UBS's involvement in a wide range of market initiatives, such as the Swiss National Bank-led project Helvetia for real wholesale Swiss franc Central Bank Digital Currency (wCBDC), as well as the Agorá project, led by the Bank for International Settlements (BIS) together with seven central banks, to unlock central bank money and tokenized deposits from commercial banks in the cross-border payment context.