Swiss National Bank Advances Wholesale CBDC Pilot Initiative
Switzerland pioneers the integration of central bank digital currency (CBDC) into the financial market infrastructure.
In a groundbreaking move towards digital finance, the Swiss National Bank (SNB) is set to launch a pilot project, Helvetia Phase III, in collaboration with six commercial banks, aimed at tokenised central bank money for financial institutions, commonly referred to as wholesale central bank digital currency (wholesale CBDC). This marks a significant leap from test environments into full-scale production.
The Swiss National Bank – together with six commercial banks – will start a pilot project with wholesale CBDC on the regulated platform of SIX Digital Exchange (SDX). https://t.co/ctBS8bHNntpic.twitter.com/3duKJIu3hl
Real Swiss Franc Wholesale CBDC Takes Center Stage
For the first time, the SNB will issue real wholesale CBDC in Swiss Francs on a financial market infrastructure built upon distributed ledger technology (DLT). This innovation will enable the settlement of actual bond transactions using wholesale CBDC, thereby increasing efficiency and security in the financial sector.
The participating banks, including Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank, will act as intermediaries for issuers and investors, conducting transactions on the DLT platform.
The Role of SIX Digital Exchange (SDX)
SIX Digital Exchange (SDX), a fully regulated DLT-based financial market infrastructure for digital assets, will be a trusted gateway and host the pilot on its digital asset platform. This partnership is a testament to the transformative power of DLT in the financial system, as noted by Jos Dijsselhof, CEO of SIX.
Expansion Beyond Bond Settlement
The scope of Project Helvetia Phase III extends beyond bond settlement. It includes the tokenisation of central bank money using the SIC infrastructure and integration with the traditional bond settlement infrastructure provided by SIX SIS. Moreover, the pilot project explores the trading and settlement of repo transactions with wholesale CBDC, with SIX Repo and SDX test systems playing a pivotal role in these initiatives.
A Secure and Efficient Future for Financial Transactions
SNB Chairman Thomas Jordan expressed optimism about the project, highlighting that it would enable the secure and efficient settlement of transactions with tokenised assets on a regulated and productive DLT platform. Tokenised assets are already gaining traction in the controlled financial system, promising increased efficiency and transparency.
Scheduled Launch and Ongoing Collaboration
The pilot project with honest Swiss Franc wholesale CBDC is set to commence in December 2023 and will continue until June 2024. This pioneering collaboration between SIX, the Swiss National Bank, and the six commercial banks signifies a significant step towards the future of digital finance, emphasising the potential of DLT to transform the financial landscape.
In a world increasingly embracing digitalisation, Switzerland’s commitment to exploring innovative solutions for the financial sector demonstrates its dedication to staying at the forefront of financial technology. The integration of wholesale CBDC into the financial market infrastructure will undoubtedly shape the future of financial transactions, making them more secure, efficient, and transparent.
