The Swiss National Bank (SNB) has announced that it will be launching a pilot project called Helvetia Phase III, which will involve the use of central bank digital currency (CBDC) on the SIX Digital Exchange (SDX) platform. This marks a significant step forward in the SNB’s exploration of digital currencies, as it will be the first time that real wholesale CBDC in Swiss francs will be issued in a live financial market infrastructure.
The participating banks, including Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank, will act as intermediaries for issuers and investors, facilitating transactions on the DLT platform and settling tokenized bonds against wholesale CBDC on a delivery-versus-payment basis.
The pilot project will run for seven months, from December 2023 to June 2024, and will also utilize the SIC infrastructure for tokenizing central bank money and the SIX SIS infrastructure for integrating with traditional bond settlement systems. Additionally, the SIX Repo and SDX test systems will be used to explore the trading and settlement of repo transactions with wholesale CBDC.
The use of DLT and tokenized assets in the regulated financial system has shown potential for increased efficiency and transparency. However, central banks face the challenge of determining how token transactions between financial institutions can be settled in central bank money, which is crucial for maintaining the stability and efficiency of the financial system.
It is important to note that this pilot project does not signify a commitment from the SNB to permanently introduce wholesale CBDC. Instead, it serves as a test bed to explore various settlement models for tokenized assets.
Thomas J. Jordan, Chairman of the Swiss National Bank’s Governing Board, expressed pride in the SNB’s international pioneering role in securely and efficiently settling transactions with tokenized assets on a regulated and productive DLT platform using real wholesale CBDC.
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| Information | Details |
|---|---|
| Geography | Europe |
| Countries | 🇨🇭 |
| Sentiment | very positive |
| Relevance Score | 1 |
| People | Thomas J. Jordan |
| Companies | UBS, Zürcher Kantonalbank, Hypothekarbank Lenzburg, Basler Kantonalbank, Banque Cantonale Vaudoise, Commerzbank |
| Currencies | Swiss Franc |
| Securities | None |
