The Swiss National Bank has launched a pilot project for a cryptographic version of the Swiss franc.

Last Updated: 14. November 2023By

Swiss Digital Exchange SIX, the Swiss National Bank SNBs, and six commercial banks will work together in a pilot project focusing on tokenized central bank money for financial institutions, also known as wholesale central bank digital currency or wCBDC. As part of this pilot project, named Helvetia Phase III, a real Swiss Franc wCBDC will be used for the first time to settle digital securities transactions.

The SIX Digital Exchange (SDX), the world’s leading fully regulated infrastructure for digital assets based on blockchain technology, will serve as a trusted bridge and host the pilot project on its platform for digital assets. The pilot project builds on the results of earlier Helvetia phases of the BIS Innovation Hub, the Swiss National Bank (SNB) and the financial infrastructure operator SIX (Helvetia Phase I and II).

From Commerzbank to UBS: Six renowned banks participate in the cooperation The Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS and Zürcher Kantonalbank are participating in the collaboration as existing SDX members. In addition to the SDX platform, the pilot project will also use the infrastructure of Swiss Interbank Clearing SIC, operated by SIX, as well as SIX SIS, the national central securities depository (CSD) of the Swiss financial market and an international central securities depository (ICSD). The pilot project will run from December 2023 to June 2024.

The aim of the pilot project is to test the settlement of primary and secondary market transactions in wCBDC in a productive environment. The participating banks will be able to issue digital Swiss Franc bonds, which will be settled on a delivery-versus-payment basis with wCBDC on an SDX. The Helvetia Phase III project will also be extended to the settlement of repo trades initiated on the SIX Repo trading platform CO:RE and managed by the SIX SIS triparty agent.

A so-called repurchase agreement is a transaction in the financial market based on the sale of a security and its subsequent repurchase at a later date. These transactions, conducted in test environments, will be backed by digital bonds eligible for SNB repo transactions and settled on the SDX in wCBDC.

The Swiss pilot project is a milestone for tokenized central bank money Switzerland is at the forefront of digital financial innovation. The collaboration between SIX, the Swiss National Bank and six commercial banks in the pilot operation for tokenized central bank money is a milestone. The developments are further evidence of the future of digital finance and underscore the transformative power of blockchain technology in the financial system.

This creates a catalyst for the introduction of digital assets, increasing transparency and efficiency in the regulated financial system and laying the foundations for the transformation into a new era of digital banking.

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