Swiss National Bank to test wholesale CBDC with business partners

Switzerland has taken another step forward with a clear roadmap for the integration of a central bank digital currency (CBDC) into the current financial system.

The Swiss National Bank (SNB), the country’s central bank, fully The second phase of the Helvetia project and its partners will integrate wholesale CBDC into the existing back-office systems and processes of five banks, Citi, Credit Suisse, Goldman Sachs​​​, Hypothekarbank Lenzburg and UBS.

The Bank for International Settlements and the Swiss financial infrastructure service provider SIX, as partners of the SNB, are participating in the second phase of the project Helvetia, which will take place in the fourth quarter of 2021.

Envisioned as a multi-phase investigation into the settlement of tokenized assets in central bank currencies, the Helvetia project aims to prepare central banks for a future where DLT-based tokenized financial assets are the norm. The project focuses on addressing operational, legal and policy-related issues in settlements. The official announcement states that the lack of an existing systematic DLT-based platform does not mean that there will be no such platform in the future.

Switzerland is an ideal country for this experiment, as a wholesale CBDC dedicated to settling interbank transfers and related wholesale transactions can by law be issued on distributed DLT platforms run and owned by private companies.

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The second phase of the Helvetia project explores settlement systems for interbank, monetary policy and cross-border transactions on the SIX Digital Exchange (SDX) test system, the Swiss real-time gross settlement system SIX Interbank Clearing (SIC) and the core bank’s test system, according to the announcement.

“In order to continue their mandate to ensure monetary and financial stability, central banks need to keep pace with technological change,” said Andréa M. Maechler, member of the SNB Governing Council. She continued:

“Project Helvetia is a prime example of how this can be achieved. It allows the SNB to deepen its understanding of how to extend the security of central bank funds to the market for tokenized assets.”

Phase 1 of the Helvetia project Happened in December 2020 And focus on issuing wholesale CBDC.