TLDR
- UBS, PostFinance & Sygnum prove deposit tokens enable instant interbank payments.
- Swiss banks test Ethereum smart contracts for compliant real-time settlement.
- Deposit tokens unlock blockchain-based interbank transfers in Swiss pilot.
- UBS-led blockchain trial shows instant, compliant payments via deposit tokens.
- Ethereum-powered proof-of-concept redefines Swiss interbank payment rails.
UBS, PostFinance, and Sygnum Bank completed a blockchain-based proof-of-concept using a deposit token to execute interbank payments. The pilot confirmed that banks could use Ethereum and smart contracts to process cross-institutional payments without traditional systems. The project marks a turning point for blockchain integration into regulated financial infrastructure.
Deposit Token Enables Instant Settlement Between Banks
UBS, PostFinance, and Sygnum Bank used a deposit token to conduct peer-to-peer and asset-backed transfers across institutions. The transactions occurred on a permissioned Ethereum environment while remaining legally binding under Swiss law. These tests established real-time payment capabilities outside the existing Swiss Interbank Clearing system.
🇨🇭 Sui goes Swiss-bank-grade.
Sui is now fully integrated into Sygnum’s regulated banking platform – unlocking custody, trading, staking, and treasury services for institutional clients.
A major step toward scaling Sui’s ecosystem for global finance. https://t.co/QINXNujC1V
— Sui (@SuiNetwork) August 8, 2025
Unlike traditional payments, the deposit token acts as a blockchain-based payment instruction, enabling automated and compliant execution. While the token itself does not carry legal ownership, it triggers final settlement off-chain. This structure ensures full legal compliance while delivering the speed and programmability of smart contracts.
The banks processed two use cases: one for interbank customer transfers, the other for escrow-style swaps of tokenized assets using deposit tokens.
Ethereum Smart Contracts Ensure Secure Compliance
The proof-of-concept leveraged a single shared smart contract on Ethereum with role-based controls and compliance integrations. This setup allowed AML, CTF, and sanctions checks while maintaining multi-bank fungibility through the deposit token. Institutions avoided legacy systems and demonstrated the effectiveness of programmable infrastructure.
The deposit token framework ensured interoperability between participants, reinforcing the advantages of public blockchains with private access layers. Execution did not require a new currency form but linked blockchain activity with off-chain core banking systems. This dual-layer approach preserved the existing financial structure while adding blockchain flexibility.
UBS highlighted that public blockchain interoperability with regulated money is feasible and supports Switzerland’s ongoing digital currency strategies.
Swiss Bankers Association Sees Future Potential
The Swiss Bankers Association coordinated the feasibility study, which fits within its broader digital currency roadmap. While the deposit token proved technically and legally feasible, scaling the system needs more engagement from banks and regulators. Current limitations include off-chain dependencies, manual operations, and limited integration depth.
Future steps will involve native on-chain account structures, automated RTGS triggers, and potential links to wholesale CBDC. These improvements could expand usage of deposit tokens in real-world financial processes.
The SBA confirmed that deposit token-based payments can be immediate, compliant, and integrated into smart contract–driven business logic. The association considers this pilot a foundational step in reshaping institutional financial rails through blockchain technology.
