Swiss Banks Collaborate on Tokenization of Deposits

Trialing Deposit Tokenization

Memorandum of Understanding Signed

Swiss banks UBS, PostFinance, and Sygnum have come together to trial the tokenization of deposits until late 2025. The Swiss Bankers Association (SBA) is facilitating the project to keep non-participating institutions informed about the progress.

Key Benefits of Tokenizing Bank Money

The project aims to explore the benefits of tokenizing bank money, such as programmability, enabling on-chain financial transactions, and the potential for instant 24/7 settlement. This initiative includes basic interbank payments and an escrow procedure for financial asset settlement.

Banking Sector Collaboration

Systemically Important Banks Involved

Two out of four Swiss systemically important banks are participating in the project, along with Sygnum, Switzerland’s first digital asset bank. The collaboration aims to ensure a smooth entry for other banks interested in joining the initiative.

Switzerland’s Digital Currency Initiatives

Switzerland has been actively involved in digital currency projects, including the Swiss National Bank’s wholesale CBDC pilot. The country’s financial sector continues to explore innovative solutions for digital asset settlement.

Importance of Action in the Banking Sector

Call for Industry Action

Dr. Martin Hess of the Swiss Bankers Association emphasized the importance of taking action in the banking sector to stay competitive in the digital economy. In a rapidly evolving financial landscape, inaction is not an option for Swiss banks.

Understanding Deposit Tokenization

Tokenization terminology can have nuanced differences, such as the distinction between a deposit token and a tokenized deposit. While there is growing interest in tokenized deposits globally, the focus of this collaboration is on deposit tokens and their potential applications.

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