Swiss Banks Complete First Blockchain-Based Interbank Payment
As Switzerland pilots the first blockchain interbank payment, a regulated path to tokenised money moves from concept to execution. UBS, PostFinance, and Sygnum settled a legally binding transfer on a public chain, coordinated by the Swiss Bankers Association. The result tests real interoperability while preserving KYC/AML and Swiss banking law.
In this article, we explain what tokenised deposits are, why public-chain settlement matters, and how the model differs from stablecoins and CBDCs. We outline the pilot’s scope, legal architecture, and technical controls, then assess near-term challenges: scalability, privacy, core-bank integration, and cross-border recognition. Finally, we translate implications for operators, advisors, and investors, and preview next steps as Swiss standards emerge in 2025. Our aim is practical: show what’s ready now—and what must mature before scale.
Publish Date
3 Nov 2025
Reading Time
10 minutes
Category
Legal News
Jurisdiction
Switzerland
Executive summary
Switzerland has achieved a new milestone in financial innovation. UBS, PostFinance, and Sygnum have completed the nation’s first interbank payment on a public blockchain using tokenised deposits. Coordinated by the Swiss Bankers Association (SBA) under its Deposit Token Feasibility Study, the initiative marks a tangible step toward blockchain-based settlement in regulated banking.
Unlike private systems, this pilot prioritised interoperability—allowing multiple banks to transact within a shared, decentralised network. The successful transfer represents not a proof-of-concept but a legally binding payment, executed and recorded on a public chain.
Background: why this matters
Interbank payments are the invisible backbone of global finance. They rely on centralised clearing systems that, while secure, often involve delays and costly intermediaries. Switzerland’s project reimagines that model.
The pilot aimed to test whether deposit tokens (DTs) – digital representations of bank deposits – can operate seamlessly across institutions. By linking these tokens to regulated bank liabilities, the project retains legal clarity while adopting blockchain’s efficiency. The SBA’s coordination ensured that results would inform both policy and industry strategy, aligning with Switzerland’s reputation as a tokenisation leader.
The pilot: how it worked
Three institutions—UBS, PostFinance, and Sygnum—issued and exchanged DTs representing Swiss-franc deposits. The transfer took place on a public blockchain, making it accessible for compliance observation and audit.
Key aspects:
- Execution: The payment was legally binding, settled in real value between the banks.
- Technology: Smart-contract logic ensured atomic settlement between tokenised cash and other on-chain assets.
- Objective: To prove that regulated banks can use public-chain infrastructure without breaching security or confidentiality rules.
According to Reuters and Blockworks, the experiment is part of a wider Swiss initiative assessing interoperability between bank infrastructures, DeFi systems, and future central-bank digital currency (CBDC) models.
Why this development is groundbreaking
The difference lies in public-chain interoperability. Most prior banking pilots use private, permissioned ledgers. This Swiss initiative used an open blockchain to demonstrate that regulated banks can transact securely in a decentralised environment.
It also validates the legal construct of tokenised deposits. Unlike stablecoins, which represent third-party promises, deposit tokens are direct claims on the issuing bank, protected by Swiss banking law and supervision. That distinction matters for institutional adoption and regulator comfort.
For the first time, banks have shown that interbank payments can occur on blockchain rails while preserving compliance with know-your-customer (KYC) and anti-money-laundering (AML) requirements.
Switzerland’s leadership in tokenisation
Switzerland continues to lead global experimentation with digital-asset infrastructure. FINMA’s pragmatic stance and the DLT Act (2021) already give legal certainty to tokenised assets and ledger-based securities.
This latest achievement follows years of groundwork by the Swiss National Bank, the BIS Innovation Hub, and the SIX Digital Exchange (SDX). While earlier pilots tested wholesale CBDC for settlement, this initiative goes further by involving commercial banks directly on a public network.
If scaled, the model could form the backbone for hybrid settlement systems, where deposit tokens, stablecoins, and CBDCs coexist.
Challenges and next steps
Despite the success, several challenges remain:
- Scalability and performance. Current public-chain throughput must handle institutional-grade transaction volumes.
- Privacy and data protection. Banks require confidential transfer mechanisms while maintaining regulatory visibility.
- Operational integration. Legacy core-banking systems must connect to token layers through robust APIs.
- Legal harmonisation. Cross-border recognition of tokenised deposits will demand coordinated regulation.
The next phase will expand participation to additional Swiss banks and explore integration with SDX infrastructure. The SBA’s report, due in 2025, will outline technical standards and compliance recommendations.
What this means for the market
- For banks and fintech operators: This pilot proves that blockchain-based payments can be executed safely within a regulated environment. Financial institutions now face strategic choices: whether to invest early in interoperable systems or risk technological lag as settlement evolves toward tokenisation.
- For legal and compliance advisors: Clients will increasingly request guidance on tokenised-deposit frameworks, custody models, and regulatory classification. Advisors must understand FATF-aligned KYC/AML controls, smart-contract enforceability, and cross-jurisdiction settlement law.
- For investors: Tokenised-finance infrastructure is emerging as a high-growth niche within the broader RegTech and FinTech ecosystem. Projects enabling compliant, programmable money flows may offer strong long-term value as banks adopt blockchain rails for interbank settlement.
Legasset’s perspective
At Legasset, we view this milestone as proof that traditional banking and decentralised infrastructure are entering a new phase of practical integration. What was once an innovation narrative is now a compliance and execution reality for regulated institutions.
FAQ: Swiss Blockchain Interbank Payment and Deposit Token Innovation
What makes Switzerland’s blockchain-based interbank payment unique?
Unlike earlier private-ledger experiments, the Swiss pilot between UBS, PostFinance, and Sygnum used a public blockchain for a legally binding interbank payment. This means regulated banks transacted on open infrastructure—while maintaining compliance with Swiss banking law and FINMA oversight. It’s the first verified instance of tokenised deposits moving between multiple institutions on a shared public network.
How do deposit tokens differ from stablecoins or CBDCs?
Deposit tokens represent claims on commercial bank deposits, backed 1:1 and subject to existing banking regulations. Stablecoins, by contrast, are issued by private entities and can face redemption and governance risks. CBDCs are central bank liabilities. Deposit tokens combine bank-grade trust with blockchain efficiency, making them a practical bridge between traditional money and digital assets.
What benefits could blockchain interbank payments bring?
Tokenised payments can reduce settlement delays, lower operational costs, and enhance transparency through programmable smart contracts. By transacting on shared infrastructure, banks can streamline cross-institution transfers and build new financial products around real-time, on-chain settlement.
How soon could this model reach commercial scale?
The Swiss Bankers Association plans to publish detailed findings from its Deposit Token Feasibility Study in 2025. If scalability, privacy, and legal harmonisation challenges are addressed, a national blockchain-based payment layer could emerge within the next few years—potentially making Switzerland the first country to integrate tokenised deposits into its core banking system.
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