The cities of Basel and Zurich in Switzerland have made history by settling tokenized bonds using a wholesale central bank digital currency (CBDC) issued by the Swiss National Bank (SNB). This milestone was achieved as part of Project Helvetia Phase III, an initiative exploring the real-world use cases of a wholesale CBDC for commercial banks. The Basler Kantonalbank acted as the issuer agent for Basel’s CHF105 million ($120.14 million) digital bond, while Zürcher Kantonalbank served as the agent for Zurich’s CHF100 million ($113 million) tokenized bond.
These bond issuances mark the beginning of a series of projects planned by the SNB and Project Helvetia Phase III participants. Both digital bonds are listed on the SIX Digital Exchange (SDX) and are tradable on both SDX and the SIX Swiss Exchange. This recent settlement using blockchain technology is the first time the Swiss banking regulator has issued a wholesale CBDC at par with Swiss francs in real-world scenarios.
The successful start of the Helvetia III pilot is attributed to strong collaboration among participants in the Swiss financial center. David Newns, Head of SIX Digital Exchange, expressed his satisfaction with the achievement, stating that it represents a major milestone for the entire industry in the adoption of a tokenized, DLT-based financial markets infrastructure.
SDX, which has received approval from the Swiss Financial Market Supervisory Authority (FINMA) to operate as a central security depository (CSD) and a stock exchange, plans to continue leveraging its experience with digital bonds. The approval allows SDX to issue, trade, settle, and hold digital assets from its customers, positioning it at the forefront of financial assets tokenization in Switzerland.
As interest in digital bonds grows among financial regulators and industry stakeholders, experts are advocating for the use of CBDCs in settlements to prevent the “cryptoization” of financial systems. Deputy Governor Denis Beau of Banque de France emphasized the importance of central banks developing CBDCs with tokenization features to avoid being overshadowed by privately issued stablecoins. Central banks from the United Kingdom, the United Arab Emirates, and Brazil are also exploring tokenization studies with CBDCs to varying degrees of success.
To learn more about central bank digital currencies and the design decisions involved in their creation and launch, nChain’s CBDC playbook is a valuable resource. Additionally, CoinGeek’s Blockchain for Beginners section provides comprehensive information for those new to blockchain technology.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Europe |
| Countries | 🇨🇭 |
| Sentiment | very positive |
| Relevance Score | 1 |
| People | David Newns |
| Companies | Swiss National Bank (SNB), SIX Swiss Exchange, Zürcher Kantonalbank, SIX Digital Exchange (SDX), Basler Kantonalbank |
| Currencies | Swiss Franc |
| Securities | None |
