Three Swiss banks have completed a proof of concept for legally binding payments on a public blockchain, a milestone in efforts to modernize the country’s financial infrastructure.
Switzerland Completes Inter-Bank Transfer Test on Public Blockchain
17 September 2025 - 08:26 CEST
Switzerland's largest bank, UBS, a local lender, PostFinance, and digital assets-focused Sygnum Bank executed the first cross-institutional transfer using tokenized bank deposits, according to a press release from the Swiss Bankers Association (SBA)
The Alpine country has sought to establish itself as an international blockchain and crypto hub in a bid to modernize a financial sector with a chequered past. The test marks an early but crucial step as Swiss banks look to retain their competitiveness while blockchain-based payment rails continue to gain ground in global finance. The SBA coordinated the project and helped oversee its execution.
Why it matters
By showing that deposits can be represented and transferred across institutions on a blockchain, the project demonstrated how traditional finance is moving on-chain.
Two use cases were tested: a payment between customers of the participating banks, and an escrow-like process where deposit tokens were exchanged for tokenized assets and settled automatically. Smart contracts governed the transfers, ensuring compliance, verifiability, and technical security. The SBA said the results confirm both technical and legal feasibility.
Just the beginning
“The tested Deposit Token is a strategic step toward the future and underscores the innovative potential of the Swiss financial center,” said Martin Hess, Chief Economist and head of the SBA’s digital currencies project. “With the successful proof of concept, the course has been set for further work—for a new, additional innovative form of digital payment.”
The results highlight both promise and hurdles. Scaling the system will require deeper collaboration with other banks, infrastructure providers, and regulators.
While the SBA emphasized the project does not yet signal the launch of a commercial deposit token, it lays the groundwork for Switzerland to define standards in tokenized finance and maintain competitiveness as the global race to build digital money infrastructure continues.
