Financial institutions collaborating on blockchain technology trials for managing bank deposits
In a significant development for the financial sector, the Association of Swiss Private Banks (AWP) and the Swiss Bankers Association (SBVg) have expressed their support for the use of shared infrastructure for instant and definitive transactions. This move could revolutionise various sectors, including securities trading and the settlement of insurance claims.
The shared infrastructure, which facilitates these transactions, is powered by smart contracts - programmable rules that execute transactions automatically upon fulfillment of specific conditions. A recent report has confirmed the technical and legal feasibility of these transactions, paving the way for their large-scale implementation.
Both the AWP and SBVg emphasise the need for additional adjustments and enhanced cooperation between banks, infrastructure providers, and authorities for the successful implementation of these transactions on a large scale. The banks and infrastructure service providers cooperating under the Swiss Bankers Association include UBS, Sygnum Bank, and PostFinance. They recently conducted a feasibility study to implement legally binding bank payments through public blockchain using deposit tokens and smart contracts.
The potential uses of this technology extend beyond securities trading and insurance claim settlement. The AWP acknowledges the potential use of smart contracts in facilitating these transactions, provided specific conditions are met. However, the AWP does not provide any new information about the legal aspects of these transactions, nor does it discuss any new challenges or obstacles to large-scale implementation beyond those already mentioned by the SBVg.
One of the key benefits of this shared infrastructure is the ability to integrate bookings into automated business processes. This means that transactions can be processed quickly and definitively, without the need for manual intervention. The SBVg also highlights that bookings can be integrated into automated business processes with this infrastructure.
In conclusion, the support of the AWP and SBVg marks a significant step forward in the adoption of smart contracts and shared infrastructure for instant and definitive transactions. With enhanced cooperation between banks, infrastructure providers, and authorities, this technology could transform various sectors, making transactions faster, more secure, and more efficient.
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