In a landmark development for institutional blockchain adoption, Swiss banking powerhouse UBS, state-owned PostFinance, and crypto banking specialist Sygnum Bank have successfully conducted the first legally binding cross-bank payments using Ethereum's blockchain. The proof-of-concept, coordinated by the Swiss Bankers Association (SBA), was executed on September 16, 2025, using a permissioned framework on the public Ethereum network.
The trial utilized deposit tokens – digital representations of bank deposits that move on blockchain – to settle transactions legally between institutions without relying on traditional payment systems. The system demonstrated two key use cases: peer-to-peer payments between customers of different banks and an escrow-like setup where deposit tokens were swapped for tokenized real-world assets.
According to the participating institutions, while Switzerland already has an efficient domestic payments network, traditional systems cannot handle programmable conditions or integrate easily with blockchain-based markets. The deposit token system enables instant transfers that can be tied to automated conditions through smart contracts, such as securities settling immediately upon ownership transfer or insurance payouts triggering automatically upon claim validation.
Christoph Puhr, UBS Group's digital assets lead, emphasized that the PoC proves "interoperability of bank money via public blockchains can become a reality," potentially accelerating developments in tokenized assets and reshaping global financial systems. The SBA confirmed the test proved technical and legal feasibility, though scaling will require broader participation from banks, infrastructure providers, and regulators.