London, November 20th, 2024 – Adhara has showcased an experimental solution enabling cross-border corporate payments on blockchain between UBS and Deutsche Bank, as part of the banks’ participation in the Eurosystem’s exploratory work on new technologies for wholesale central bank money settlement.

The experiment aimed to implement a payment orchestration service through which cross-border payments between simulated corporate clients of both banks were sent and settled. It leveraged blockchain-based tokenized deposits of each bank and the Bundesbank’s Trigger Solution as a means for inter-bank settlement. The experiment was able to demonstrate interoperability and consistent atomic settlement of different legs of payments in real time.

The experiment included a blockchain-based payments orchestration layer run by one of the participating banks and capable of implementing payments as single digital objects with a single status known by all parties, and two tokenized deposits facilities to issue tokenized cash in several currencies, all based on Adhara’s Tokenized Deposits Hub solutions.

The tokenized deposits serve two purposes, namely as a means to debit and credit the token balance for simulated corporate clients and for different branches within each bank as a form of intra-group tokenized settlement liquidity. The experiment showcased that the Bundesbank’s Trigger Solution can be used for settlement between both tokenized deposits facilities. The role of the blockchain-based payments orchestration layer is to ensure the consistent and atomic execution of all the different settlement legs at both banks required for a payment in real time.

During the experiment, two types of payment flows were considered: time-critical euro payments between simulated Deutsche Bank and UBS clients and FX-payments originally denominated in Swiss francs and British pounds. Both flows were settled in euro in the test environment (UTEST) of TARGET services by using the Trigger Solution.

The experiment proved a seamless interoperability pattern between bank-side digital cash with new forms of central bank digital settlement such as the Bundesbank’s Trigger Solution, enabling real-time operation and consistent atomic settlement between different systems based on diverse underlying technologies. In combination, this setup can enable better and faster payments services to corporate clients, providing unparalleled transparency across the whole payment lifecycle, reducing the possibility of errors, and providing certainty of success and even instant settlement in cross-border transactions.