Swiss banking giant UBS has completed a successful pilot project leveraging blockchain technology to streamline cross-border payments for multinational companies. Dubbed UBS Digital Cash, the solution enabled participants to execute transactions both locally and internationally, enhancing settlement times and providing unprecedented transparency.
Andy Kollegger, Head of Institutional Banking at UBS, stated, “UBS Digital Cash aims to make cross-border payments more efficient and transparent for our clients.” He highlighted that blockchain-based solutions for such payments are a strategic focus for UBS, marking the successful pilot as a significant milestone.
The pilot, which focused on multinational firms, addressed the ongoing challenges of slow, costly, and opaque cross-border transactions. These companies, with vast global networks, handle billions in transfers daily, yet face inefficiencies in current payment systems. UBS joins several other financial players exploring blockchain’s potential in this space, including Ant International, which developed Whale, a blockchain-powered liquidity management solution for large global firms.
Unlike many blockchain solutions deployed on private networks, UBS’s Digital Cash pilot utilized a private permissioned blockchain. This network incorporated smart contracts, automating payments and offering a 24/7 settlement capability, a critical feature for global companies dealing with time zone differences.
The pilot allowed payments in Swiss francs, U.S. dollars, euros, and Chinese yuan, helping UBS move liquidity across its various subsidiaries. Autoneum, a global supplier of vehicle acoustics, was one of the participants. Janko Hahn, Head of Treasury at Autoneum, emphasized the benefits of blockchain-based payments, noting faster transactions and enhanced traceability.
UBS’s Digital Cash pilot aligns with its broader blockchain strategy, which includes initiatives in Central Bank Digital Currencies (CBDCs) and tokenization. Recently, the bank announced a partnership with SBI to launch a tokenized money market fund on a public blockchain, complementing other industry projects like Project Agora and Project Helvetia, led by the Bank for International Settlements.
Amazon Explores Tokenization to Speed Seller Payments
In a separate development, Amazon has piloted a stablecoin-based solution aimed at accelerating payments to sellers on its platform. Partnering with NTT Data, Japan’s largest IT firm, and Singaporean fintech startup StraitsX, Amazon unveiled the solution at the Singapore Fintech Festival, organized by the Monetary Authority of Singapore (MAS).
Currently, Amazon Marketplace sellers face delays of up to two months to receive payments, a challenge particularly burdensome for smaller businesses needing liquidity. The new solution allows sellers to tokenize their receivables, enabling them to sell the tokens to lenders and secure faster access to funds.
StraitsX provided the tokenization technology, allowing sellers to receive XSGD stablecoins upon tokenizing their receivables. These tokens could then be exchanged for fiat currency. The solution uses purpose-bound money (PBM), a type of programmable digital currency that the MAS views as a potential model for future Central Bank Digital Currencies (CBDCs).
While the solution was showcased at the event, Amazon has yet to announce plans to implement it further. However, the pilot presents a glimpse into how tokenization could address liquidity challenges for businesses operating in the digital economy.
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