UBS, PostFinance & Sygnum Conduct Cross-Bank Payments on ETH

Swiss banking heavyweight UBS, crypto-bank Sygnum and PostFinance — the payments arm of state-owned Swiss Post — successfully ran a proof-of-concept that moved deposit tokens between institutions on Ethereum, the three banks and the Swiss Bankers Association announced Tuesday. The pilot used digital representations of bank deposits that can transfer on a public blockchain, settling legally between banks without relying on the traditional payment rails.

Transactions were executed on Ethereum within a permissioned framework, demonstrating that deposit tokens can enable instant, programmable transfers tied to smart-contract conditions.

The trial tested two concrete use cases:

• Peer-to-peer payments between customers of different banks
• An escrow-like flow where deposit tokens were swapped for tokenized assets

Organizers highlighted potential real-world applications such as:

• Securities trades that settle automatically when ownership transfers
• Insurance payouts that trigger once a claim is validated

While the experiment confirmed technical and legal feasibility, participants cautioned that scaling this model will require broader buy-in from banks, infrastructure providers and regulators.

Switzerland’s existing domestic payments network is efficient but lacks native support for programmability and easy integration with blockchain-based markets — gaps deposit tokens could fill if adopted more widely.

“The work aligns with its strategic priority on digital currencies, but the pilot is not an immediate step toward commercial deployment,” the Swiss Bankers Association said.

The pilot demonstrates technical and legal possibilities for cross-bank tokenized deposit transfers on a public blockchain, while emphasizing that further collaboration and regulatory clarity are needed before any commercial roll-out.