UOB and HSBC Complete Swift Blockchain Tokenized Deposit Cross-Border Transfer

Singapore's United Overseas Bank (UOB) and HSBC announced this week that they have completed a cross-border transaction in Hong Kong dollars on Swift's blockchain-based ledger, making UOB the first Singapore-headquartered bank to go live on the platform. This follows the inaugural transaction completed by HSBC and Standard Chartered last week.

The Swift ledger serves as an orchestration layer between banks' respective tokenized deposit platforms, rather than directly processing payments. As with all commercial bank money payments, the transaction occurs in two steps: the customer payment leg uses each bank's tokenized deposits, while interbank settlement is conducted via RTGS or correspondent banking. The Swift ledger also assists in orchestrating netting calculations for interbank settlement.

Beyond the Hong Kong dollar pilot, UOB plans to execute Singapore dollar and US dollar transactions on the ledger in September, with additional partner banks set to join. Notably, these transactions will include domestic interbank payments, extending the ledger's use case beyond the cross-border payments for which Swift was originally positioned. UOB did not explain why it is using Swift for domestic transactions, but possible reasons include supporting multi-currency payments for corporates and providing 24/7 transaction services for currencies not covered by Singapore's FAST payment system.