The project was conducted by the Swiss Bankers Association (SBA), PostFinance, Sygnum and UBS, the association said in a Tuesday (Sept. 16) press release.
“The tested token is a strategic step towards the future of the payment system and underlines the innovative capacity of the Swiss financial center,” Martin Hess, chief economist and head of the SBA’s Digital Currencies Project, said in the release.
The project tested two use cases of deposit tokens: payments between customers of different banks and an automated exchange of assets in a trust-like process, according to the release.
In both cases, the technology worked, the payments were legally binding, and they ensured compliance with regulatory requirements and depositor protection, per the release.
PostFinance Head of Digital Assets Alexander Thoma said in the release that the deposit token could make payment transactions more efficient and secure for all parties and that the study showed that “blockchain technology works for this and is legally viable.”
Advertisement: Scroll to Continue
Sygnum Deputy CEO Thomas Eichenberger said: “Blockchain technology will bring about lasting change to the financial market and payment system.”
UBS Group Digital Assets Lead Christoph Puhr said the proof of concept “shows that the interoperability of bank money via public blockchains can become a reality.”
The next phase of development of the deposit token will involve adjustments to the deposit token model and the participation of additional banks and authorities, according to the release.
“The aim is to make the advantages of blockchain-based payment methods available to Swiss bank customers,” the release said.
PYMNTS reported in October 2023 that deposit tokens are digital coins representing a deposit claim against a commercial bank and that central banks and traditional financial institutions were tackling various ways and means of creating and using these tokenized bank deposits.
In June, JPMorgan Chase announced plans to launch a deposit token that will serve as a digital representation of commercial bank money and will be available only to the bank’s institutional clients.
