UBS is the latest bank to launch a blockchain based solution targeted at corporates and institutions. Given there are often delays with cross border payments, the appeal is the ability to instantly move money between different UBS branches dotted around the world. So far it has piloted domestic transactions and international payments in US dollars, Swiss francs, Euros and Chinese renminbi on its private blockchain.
The main benefits of these types of solutions are the ability to move money instantly across borders including 24/7, added transparency and the possibility of programming conditions. With digital payments, the transfer either happens or it does not. Hence, there’s less risk of in-limbo payments, as happens sometimes on conventional payment rails.
For corporate treasurers, that means they can ensure money is in the right place at the right time, and they control the extent of credit charges or the size of liquidity buffers. Programmability allows them to embed conditions for when payments are made.