Three Swiss banks – UBS, Postfinance and Sygnum – finished a deposit test in Tokenized under the aegis of the Swiss Bankers Association. The proof of concept (POC) was carried out on the public blockchain Ethereum, although the tokens triggered conventional payments outside the chain. Future iterations plan to explore the digital deposit tokens natively.
The trial addresses the limits of the current payment infrastructure. Despite the existence of an effective Swiss payment system, banks see a need to be able to use smart contracts to program payments and would like to transfer larger 24 hours a day.
The two cases of use tested included interbank payments and an entire mechanism for the regulation of tokenized asset transactions. The results have demonstrated both the technical and legal feasibility of the solution. From a legal point of view, in order to be processed as a conventional payment, the token is a digital representation of a payment instruction.
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