UBS has recently launched UBS Digital Cash, a blockchain-based digital currency system that aims to improve the efficiency of domestic and international transactions for commercial and institutional clients.

This system supports multiple currencies, including Swiss francs, U.S. dollars, Chinese yuan, and euros, and aims to reduce reliance on traditional intermediaries by integrating compliance controls through smart contracts.

UBS Digital Cash offers several advantages, such as a transparent and immutable blockchain ledger that enhances trust by safeguarding transaction data against cyber threats. It also automates clearing, settlement, and funds transfer processes, enabling real-time payments that minimize costs and delays by bypassing regulatory intermediaries.

Experts predict that the total transaction value of instant payments will increase significantly from $2 billion in 2019 to an estimated $376 billion by 2028. However, the introduction of digital currencies may have unintended consequences, including inflationary pressures, increased economic activity, and heightened banking risks.

As digital currencies gain popularity, governments and central banks will need to review fiscal and monetary policies to manage the macroeconomic impacts, leading to a demand for stronger regulations in this emerging technology.