Switzerland’s ongoing work on a digital deposit token has moved a step forward following a recent trial involving several domestic financial institutions. The initiative, coordinated by the Swiss Bankers Association (SBA), aims to create a blockchain-based version of the CHF that functions within existing regulatory and settlement frameworks.
Earlier this year, PostFinance, Sygnum Bank, and UBS took part in a Proof of Concept that used deposit tokens to complete enforceable cross-bank transfers on a public blockchain while retaining the conventional inter-bank clearing infrastructure for settlement. The arrangement showed how deposits could remain within the banking system yet circulate on-chain, a structure viewed by industry observers as part of Switzerland’s effort to modernise its payments landscape.
Pilot indicates compatibility between systems
Supporters of the model argue that such a token could later support a wider set of use cases, including automated escrow, machine-generated payments, and the issuance and transfer of tokenised assets. The Swiss approach is being watched closely as other jurisdictions examine mechanisms for integrating programmable money into established financial rails.
A representative from D24 Fintech noted that the exercise shows how banks are beginning to reassess their operational foundations in the context of emerging digital technologies. According to the official, the shift toward tokenisation across sectors, from commodities to real-estate interests, made the extension of these principles to bank deposits a foreseeable development. The pilot, the representative said, illustrates that regulated institutions can experiment with digital money while maintaining the protections associated with traditional deposits.
The same representative added that the study highlights potential operational advantages, such as quicker settlement between institutions, lower counterparty exposure, clearer auditability, and the possibility of automating payment flows through smart contracts. They cautioned, however, that central banks and supervisors will need to refine policy and oversight frameworks to keep pace with these emerging models.
