Swiss National Bank's Six-Month Pilot Tests Viability of Wholesale Digital Currency Issuance
Summary:
The Swiss National Bank (SNB) alongside six commercial banks and the SIX Swiss Exchange have initiated pilot project Helvetia Phase III. It seeks to test the viability of issuing wholesale central bank digital currencies (CBDCs) or Swiss franc wCBDC. The six-month pilot project, which runs from December 2023 to June 2024, will involve the issuance of digital Swiss franc bonds settled against wCBDC. Alongside, Swiss Financial Market Supervisory Authority is also participating in several crypto-pilot initiatives internationally. These efforts aim to analyze and enhance cross-border collaboration in relation to digital currencies.
The Swiss National Bank (SNB), in collaboration with six commercial banks and the SIX Swiss Exchange, has embarked on a pilot project to test the issuance of wholesale central bank digital currencies (CBDCs), also referred to as the Swiss franc wCBDC. The project, titled Helvetia Phase III, aims to examine the Swiss Franc wCBDC's effectiveness in settling transactions involving digital securities. This phase derives its foundation from the takeaways of the earlier two phases, Helvetia Phases I and II, carried out by the SNB, BIS Innovation Hub, and SIX. Participating in the pilot, are Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank, all of whom also members of the SIX Digital Exchange (SDX). The pilot, which will be facilitated on the SDX platform and employ the infrastructure of the Swiss Interbank Clearing (SIC), is slated to run for six months, from December 2023 to June 2024. During this period, "the goal is to validate, in a real-time operational environment, the transaction settlement of primary and secondary market with the wCBDC". Participating banks will "issue digital Swiss franc bonds, with settlements tied to the delivery-versus-payment basis of wCBDC". Transactions executed in the test environment will be backed by digital bonds and finalized on SDX via wCBDC. Concurrently, the Swiss Financial Market Supervisory Authority (FINMA) is involved in several crypto-pilot initiatives with the Financial Services Agency of Japan (FSA), the Financial Conduct Authority of the UK (FCA), and the Monetary Authority of Singapore (MAS). As reported by Cointelegraph, these regulatory bodies are specifically looking to conduct pilots involving fixed income, foreign exchange, and asset management products. The MAS stresses on the need for enhanced cross-border collaboration, as pilot projects become more advanced and expansive.
Published At
11/2/2023 10:13:24 AM
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