"We're also working on private blockchains and 'known' networks, as we think that might be a better application of the technology for some institutions. The idea with smart securities is that the battery comes included: to create contracts that can act on the blockchain autonomously, from issuance and corporate actions to decentralized secondary trading, clearing, settlement and transfer."
Smith says the early target is illiquid securities and funding activities — including both traditional venture-capital and crowdfunded private-equity transactions, as well as other applications like merchant banking, intercompany funding, and syndicated loans. The firm is already integrated into multiple tier-one banks' development programs and blockchain pilots. Many are focused on smaller use cases that don't already have processing intermediation in place, relying instead on spreadsheets and fax, and at least a few should be implemented by year's end.

Smart-bonds are one of the first publicly confirmed technologies the Swiss banking giant is said to be exploring since the launch of The innovation Lab in April to explore how blockchain technologies could improve the banking sector. The creation of the lab came after the publishing of an extensive report about the benefits of the blockchain by the international bank.

When the report was published, UBS Group CIO Oliver Bussmann told the Wall Street Journal, “I believe – and this is my personal view – that blockchain technology will not only change the way we do payments, but it will change the whole trading and settlement topic.”