In a landmark development for Switzerland’s financial sector, UBS, PostFinance and Sygnum have jointly completed what has been described as the country’s first legally binding interbank payment using tokenized bank deposits on a public blockchain. The pilot project, overseen by the Swiss Bankers Association, was designed to test the practicality of using deposit tokens for settling payments between institutions. Industry observers indicated that the success of the trial could mark the beginning of a new chapter for blockchain-powered financial services.
The transaction took place on the Ethereum network and has been recognized as the first binding interbank payment of its kind in the nation. Deposit tokens, which are digital equivalents of fiat deposits, enable banks to transfer value securely through blockchain systems while still adhering to established regulatory requirements. Analysts suggested that this accomplishment highlighted Switzerland’s ability to combine innovation with compliance, reinforcing its reputation as a hub for advanced financial experimentation.
Testing real-world use cases
The pilot project validated two key applications for deposit tokens. The first simulated a cross-institutional payment where customers from different banks transferred value, resembling traditional interbank settlements but executed with blockchain efficiency. The second explored a conditional settlement scenario in which deposit tokens were exchanged for tokenized real-world assets using smart contracts. This arrangement, similar to an escrow model, demonstrated blockchain’s ability to automate complex financial processes through conditional triggers.
Balancing innovation with compliance
A central focus of the trial was ensuring that legal and regulatory frameworks were fully integrated into the system. The transactions were binding under Swiss law and incorporated compliance measures such as anti-money laundering checks, sanctions screening, and ongoing regulatory oversight. Settlement finality was still maintained by the Swiss Interbank Clearing system, creating a hybrid structure where blockchain technology provided transparency and automation, while traditional infrastructure ensured legal and operational certainty.
Challenges for scaling adoption
While the results showcased the feasibility of secure and compliant blockchain-based interbank payments, experts cautioned that scalability remains an obstacle. Current blockchain networks continue to face limits in transaction throughput, meaning wider adoption would require enhanced designs capable of handling higher volumes. Interoperability across different banking platforms also emerged as an area requiring further development to ensure seamless cross-border and cross-platform transactions.
.@Reuters' @m_kaesebier spoke with Thomas Frei, Sygnum Head of Product Innovation, about Sygnum joining @UBS and @PostFinance in a deposit token feasibility study under the Swiss Bankers Association (Swiss Banking).
✅ Tokenized deposits across different banks
"Deposit tokens… pic.twitter.com/4Srinmbquh— Sygnum Bank (@sygnumofficial) September 17, 2025
Switzerland’s leadership in blockchain finance
The proof-of-concept demonstrated Switzerland’s willingness to integrate emerging technologies into established financial and regulatory systems. Governance models were designed with role-based access, oversight for smart contracts, and structured collaboration between banks and regulators. Analysts suggested that this combination of technical efficiency and legal reliability could set benchmarks for other jurisdictions exploring blockchain-based payments.
Although the project remains at the pilot stage, it is being viewed as a significant step toward mainstream adoption. Future progress will depend on broader participation from financial institutions, closer coordination with infrastructure providers, and greater standardization of compliance protocols across systems.
A glimpse of the future of payments
By demonstrating that binding payments between banks can take place over a public blockchain, UBS, PostFinance and Sygnum have provided a real-world example of how decentralized technology can be harmonized with trusted financial oversight. Industry commentators noted that Switzerland’s progress places it at the forefront of blockchain innovation in global finance. As other banks and regulators consider the evolution of payment systems, the Swiss experiment may serve as an influential model for the future integration of blockchain into traditional finance.
