September 19, 2025
By Our Correspondent
According to the Swiss Bankers Association, which was cited by Reuters, three Swiss banks—including UBS—have made a legally binding payment for the first time utilizing bank deposits and a public blockchain.
PostFinance, Sygnum Bank, and UBS conducted the payment as part of a feasibility study on the use of deposit tokens.
“This is something really new,” Sygnum Bank’s head of product innovation, Thomas Frei, acknowledged.
Deposit tokens are the result of “tokenizing” bank deposits so they may be used on the blockchain. Clients settled their individual transactions by sending tokens on the blockchain that mirrored bank deposits during the research.
“Our tokenized deposits can be used across different banks, which is something that was not there yet,” Frei stated.
According to him, the study demonstrated that the banks could insure against counterparty risk. Although JPMorgan also had tokenized deposits, Frei clarified that these could only be utilized within JPMorgan.
“Basically, what we did is we launched a kind of new form of payments on the blockchain, which is an alternative to stablecoins,” Frei explained. Cryptocurrencies that are based on the value of another currency, commodity, or financial instrument are known as stablecoins.
According to the SBA, in the future, payments could be linked straight into automated business processes in addition to being completed instantly and conclusively on shared infrastructure.
According to Frei, more work must be done before the banks are prepared to launch the product.
