Swiss Banking Powerhouse UBS, Crypto Banking Specialist Sygnum and Post Finance, a subsidiary of the state -owned Swiss positions, successfully tested payments between institutions at Ethereum, according to a press release on Tuesday.
The proof of concept runs under the Swiss Bankers Association, so that UBS, Postfinance and Sygnum Bank perform transactions using the deposit token – digital representations of bank deposits that can move on a public blockchain.
The payments were legally legally between banks without relying on the traditional payment system. The transactions were carried out at Ethereum using a permitted frame.
Switzerland already has an effective domestic payment network, but traditional systems cannot handle programmable conditions or easily integrate with blockchain-based markets, companies say. With the deposit tokens, transfers in the future could be treated immediately and bound to automated conditions through smart contracts.
For example, a securities trading could run as soon as ownership is transferred or an insurance payment can trigger when a claim is validated.
The lawsuit tested two application cases: Peer-to-peer payments between customers in different banks and an escrow-like setup where the payment tokens were switched to tokenized assets.
While the project confirmed technical and legal feasibility, the scaling of the system will require a wider participation from banks, infrastructure providers and regulators. Swiss Bankers Association said the work falls under its strategic priority on digital currencies, but the pilot does not mean that the deposit tokens will be introduced immediately.
