A new era of global cross-border payments! UBS completes Blockchain payment pilot, how to change the financial landscape

With the opening of the 2024 Singapore Fintech Festival, TradFi giants such as Swift, Chainlink, JPMorgan, UBS, Citigroup, and Fidelity Investments have successively announced their respective RWA sandbox test results. Yesterday, UBS announced once again that the team has completed the transaction pilot of the 'UBS Digital Cash' blockchain payment solution; in the future, its clients will be able to achieve more efficient and cost-effective cross-border payments through the system.

UBS Digital Cash Pilot Content

According to an official press release, UBS has tested the blockchain transfer of CBDC with multiple multinational banks, including fiat currency trading in Switzerland and CBDC cross-border payments based on the US dollar, Swiss franc, euro, and Chinese coin. After the successful pilot, they also plan to further expand the coverage of UBS Digital Cash globally in the future.

Andy Kollegger, Head of UBS Cross-Border Banking, pointed out that the development goal of UBS Digital Cash is to assist clients in conducting cross-border payments in a more transparent and efficient manner.

"Cross-border payment solutions based on blockchain technology are a strategic focus for UBS, and the UBS Digital Cash pilot program has taken us one step closer to success."

Why does UBS need Blockchain payment system?

Kollegger pointed out that the Settlement efficiency of cross-border payments has been poor, making it difficult for companies to fully understand the cash flow situation. Now, UBS Digital Cash will optimize payment transparency, security, and overall payment process for them. With greatly enhanced asset transparency, companies can also easily manage account liquidity and create a more user-friendly environment for customers.

Janko Hahn, the finance and operations manager of Autoneum, participating in the pilot, said: "UBS Digital Cash demonstrates the key advantages of Blockchain technology, enabling cross-border transactions to be faster, more punctual, and fully traceable, all of which are indispensable in the global market."

Xiaonan Zou, head of UBS Asset Management, also believes that UBS Digital Cash is crucial for the financial industry. In addition to bank agents, this solution has the potential to streamline capital market processes.

How does UBS Digital Cash work?

UBS Digital Cash uses a private blockchain network with limited access to authorized clients, and its Settlement process can be automatically executed through Smart Contracts. Specifically, customers can customize payment conditions through UBS Digital Cash to allow the blockchain to automatically transfer CBDC within the account after the conditions are met. On the other hand, UBS Digital Cash based on blockchain technology also has the 24/7 year-round, full-time trading that Web3 residents are accustomed to. This will maximize the trading flexibility of traditional Financial Institutions and is expected to attract more traditional investors into the blockchain sector, thus achieving seamless integration between Web2 and Web3.

Why is RWA so attractive when Credit Suisse is taking frequent actions?

UBS Digital Cash is part of the 'Agora' initiative launched by the Bank for International Settlements (BIS), which aims to build a global tokenization cross-border payment system, enabling tokenized assets to circulate around the world.

In fact, UBS has invested in multiple tokenization projects, one of which, 'UBS Tokenize,' successfully launched the first tokenization fund, '$uMINT,' through the Ethereum blockchain on the 1st of this month. The purpose of this series of tokenization applications is generally the same, aiming to reduce transaction fees, improve transaction processes, enhance Settlement efficiency, and expand their audience.