Swiss banks claim first binding payment using public blockchain

Core Insights - Three Swiss banks, including UBS, have successfully conducted a binding payment using bank deposits on a public blockchain for the first time, marking a significant innovation in the banking sector [1] - The payment was part of a feasibility study on the use of deposit tokens by PostFinance, Sygnum Bank, and UBS, indicating a collaborative effort among these institutions to explore blockchain technology [1][2] Group 1: Deposit Tokens - Deposit tokens are bank deposits that have been tokenized for use on the blockchain, allowing clients to send tokens representing bank deposits to settle transactions [2] - The tokenized deposits can be utilized across different banks, a feature that was previously unavailable, enhancing interoperability among financial institutions [2][3] Group 2: Counterparty Risk and Payment Innovation - The study demonstrated that the participating banks could effectively manage their counterparty risk, which is crucial for the adoption of such technologies [3] - This initiative represents a new form of payments on the blockchain, serving as an alternative to stablecoins, which are cryptocurrencies pegged to other assets [3] Group 3: Future Prospects - Future developments could enable immediate and definitive payment processing on shared infrastructure, with potential integration into automated business processes [4] - Further work is required before the banks can fully roll out this product, indicating that while progress has been made, additional steps are necessary for implementation [4]