PostFinance, Sygnum Bank and UBS, under the umbrella organisation of the Swiss banks, the Swiss Bankers Association (SBA), have completed a deposit token proof of concept, achieving Switzerland’s first legally binding interbank payment on a public blockchain using bank deposits.
The feasibility study lays the groundwork for a standardised infrastructure for blockchain-based financial services in Switzerland. Although Switzerland’s domestic payment system is efficient, the report notes limits for new applications: traditional payments cannot be programmed, lack 24/7 availability for large transfers, and offer only limited integration with blockchain ecosystems.
“By representing bank deposits on the blockchain, payments could in the future not only be processed immediately and definitively on a shared infrastructure but also be integrated directly into automated business processes,” shared the provider.
Smart contracts would enable conditional payments, reduce risks, and accelerate complex transactions, advancing areas such as securities trading, insurance settlements and machine-to-machine transactions. This kind of automation unlocks potential for new digital services, providing customers with fast, secure and transparent payment processes.
The proof of concept tested two use cases: interbank payments between customers and an escrow-like exchange of Deposit Tokens for tokenised assets, with transactions executed automatically via smart contracts. The PoC focused on the off-chain transfer of fiat money, triggered by payment instructions tokenised on the blockchain. Its governance structure was based on clearly defined roles and smart contracts, enabling verifiable processes, technical security and compliance with regulatory requirements.
The results confirmed that deposit tokens can function across banks on a public blockchain while meeting legal and regulatory standards. However, scaling up will require design adjustments and cooperation with other banks, infrastructure providers and authorities.
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Martin Hess, chief economist and head of the SBA’s digital currencies project, commented: “The tested Deposit Token is a strategic step toward the future and underscores the innovative potential of the Swiss financial center. With the successful Proof of Concept, the course has been set for further work—for a new, additional innovative form of digital payment.”
Alexander Thoma, head digital assets, PostFinance, said: “The deposit token offers great potential for making payment transactions more efficient and secure for all parties in the future. The proof of concept has shown that blockchain technology works for this purpose and is legally viable. We are ambitious to continue working on this innovative solution and to contribute PostFinance’s expertise in the area of payment transactions and digital assets.”
Thomas Eichenberger, deputy CEO of Sygnum Bank, added: “Sygnum was founded on the conviction that blockchain technology will sustainably revolutionise the financial market and payment system. Since then, the company has been doing pioneering work and, together with partners such as UBS and PostFinance, has been demonstrating the potential of this technology with concrete implementation examples. The aim is to drive innovation and create long-term added value for the Swiss financial center.”
Christoph Puhr, digital assets lead, UBS Group, commented: “The PoC demonstrates that interoperability of bank money via public blockchains can become a reality, enabling innovation around tokenised assets. This ac celerates innovation in tokenised assets and makes it possible to actively shape the future of financial systems—both nationally and globally.“
