Crypto Finance tests instant bank transfers on Google Cloud

Crypto Finance Group has completed a pilot on Google Cloud's Universal Ledger for instant account-to-account transfers between customers of two Swiss banks. The project tested tokenised deposit payments within Switzerland's banking framework.

The pilot involved Crypto Finance as the network's "currency operator", alongside a Swiss digital asset bank and a Swiss business-to-business transaction bank. It provides a model for commercial banks seeking to use tokenised deposits, rather than public stablecoins, for round-the-clock payments.

Banks have shown growing interest in blockchain-based payment systems as stablecoins such as Tether, USDC and PayPal USD gain wider use for faster settlement. Many regulated lenders have remained cautious about adopting public stablecoins directly because of capital and liquidity rules, regulatory uncertainty, compliance concerns around anonymous accounts, gas fees and the limits of public blockchain throughput.

Google Cloud is positioning Universal Ledger, or GCUL, as an alternative that lets banks issue and settle tokenised deposits while keeping transactions within commercial bank money. In the Swiss pilot, the system enabled instant transfers for customers, while settlement between banks was deferred and carried out periodically.

How it worked

In the trial, Crypto Finance set the network's rulebook, including interbank settlement arrangements, links to traditional Swiss Interbank Clearing rails, and anti-money laundering and compliance protocols. That role also allowed it to decide whether the network would settle each payment immediately or defer settlement and net positions later.

The pilot used deferred settlement. This let client transfers appear instant while helping participating banks conserve liquidity by settling the net difference at set intervals rather than funding each transaction individually.

The project was designed around Swiss regulatory requirements. To join the Swiss franc network on GCUL, participants needed licences permitting third-party transfers and the issuance of commercial bank money.

Governance and controls were handled through the currency operator model. Fees, transaction limits, settlement times and technical settings were set within that framework, while issuance limits were used to manage counterparty risk between banks.

Integration model

Systems integration for the pilot was completed in less than three months. Each participant used a dedicated Google Cloud project, while Crypto Finance connected specialised components to a dedicated GCUL application programming interface.

These included an administration service for account and token managers, a settlement registry to record when off-ledger settlement had taken place once a threshold was reached, and a cloud key management service for signing transactions. Participating banks connected their core banking systems to separate GCUL API instances.

Banks do not need to move large parts of their infrastructure into Google Cloud to connect to the ledger. Instead, they can connect to GCUL nodes from existing on-premises systems through remote procedure calls and use alternatives to Google's key management tools for private key storage.

In the Swiss trial, the participating banks chose to use the ledger as back-end infrastructure rather than expose it directly to customers. That approach improved intraday transaction performance while keeping the user experience familiar for clients.

Operational focus

One of the central questions for banks considering blockchain-based payment rails is whether such systems can meet the security and availability standards expected of financial infrastructure. Google Cloud said GCUL uses geographically distributed nodes and a consensus model intended to support resilient payment operations.

It also argued that the architecture avoids several obstacles associated with public, permissionless blockchains, including unpredictable transaction costs, anonymity risks and regulatory complications. Those issues have often made banks reluctant to build customer payment services directly on public chains.

Some steps in the pilot still required manual intervention, but the work showed that fully automated integration across institutions is feasible. Google Cloud also said the design could be extended beyond bank deposits to other asset classes.

The project reflects a broader push in financial services to combine the speed associated with blockchain settlement with the controls expected in regulated banking. Rather than using reserve-backed stablecoins that can shift deposits away from banks, tokenised deposits keep funds within the banking system and may avoid some of the balance-sheet concerns tied to public stablecoins.

Crypto Finance and the participating banks used conservative initial issuance limits in the trial based on credit ratings. Google Cloud said the broader network model could free up more capital over time by netting obligations periodically instead of requiring every payment to be settled individually.

It also pointed to possible extensions, including cross-currency settlement, automated foreign exchange and collateral arrangements involving tokenised digital assets. For the Swiss pilot, however, the main result was narrower: a working test of instant bank-to-bank customer transfers on a tokenised deposit network integrated with existing banking systems.