The development of a digital deposit token in Switzerland has taken an important stride forward, following recent trials involving multiple domestic financial institutions. This project, overseen by the Swiss Bankers Association (SBA), seeks to establish a blockchain-based version of the CHF within existing regulatory and settlement frameworks.
In early 2023, PostFinance, Sygnum Bank, and UBS participated in a Proof of Concept that utilized deposit tokens for cross-bank transfers on a public blockchain while maintaining conventional inter-bank clearing infrastructure for settlement. This arrangement demonstrated how deposits could remain within the banking system yet circulate on a distributed ledger, an approach seen by industry experts as part of Switzerland’s efforts to modernize its payments landscape.
Positive Outcome of the Trial
The outcome of this pilot suggests compatibility between blockchain and traditional banking systems. Proponents believe that such tokens could support additional use cases, including automated escrow services, machine-generated payments, and tokenized asset issuance and transfer. Switzerland’s approach in this area is being carefully observed by other jurisdictions as they consider integrating programmable money into their established financial frameworks.
A spokesperson from D24 Fintech pointed out that the exercise illustrates how banks are increasingly reevaluating their operational bases in light of emerging digital technologies. According to the spokesperson, the shift toward tokenization across various sectors—ranging from commodities to real estate interests—makes the extension of these principles to bank deposits a foreseeable development. The pilot, as noted by the representative, highlights that regulated institutions can experiment with digital money while preserving traditional deposit protections.
The same source also mentioned operational benefits such as faster inter-institutional settlement, reduced counterparty risk, enhanced auditability, and the potential for automating payment flows through smart contracts. However, they emphasized that central banks and supervisory bodies must develop appropriate policy and oversight frameworks to align with these new models.
