The Swiss National Bank has successfully used wholesale CBDC to settle transactions with five commercial banks, the monetary authority announced. The tests are part of an experiment with the Bank for International Settlements and Swiss financial services provider SIX.
Swiss Central Bank Tests Integration of Wholesale CBDC Settlement with Private Banking
Extensive transactions involving wholesale central bank digital currencies (CBDC) in a press release issued by the Swiss National Bank (SNB) on Thursday that the second phase of the Helvetia project has been processed.
The trials are part of a joint initiative of the Swiss National Bank, the Bank for International Settlements (BIS) and SIX, a major Swiss provider of financial infrastructure services. Five commercial banks are also involved – Citi, Credit Suisse, Goldman Sachs, Hypothekarbank Lenzburg and UBS.
The experiment, conducted in the last quarter of 2021, explores the settlement (SIC) and core banking systems for interbank, monetary policy and cross-border transactions on the SIX Digital Exchange (SDX) test system of the Swiss real-time gross settlement system SIX Interbank Clearing, Switzerland Central bank details.
The Swiss Central Bank and other banks have integrated wholesale CBDCs in their existing back-office systems and processes. SNB pointed out that in the future, more and more financial assets will be tokenized, and financial infrastructure will run on distributed ledger technology (DLT). Regulators may need to cover tokenized asset markets in their monetary policy, the authority said, elaborating:
International regulatory standards indicate that operators of systemically important infrastructure should settle liabilities in central bank currency where feasible and available. While none of the existing DLT-based platforms are systematic, they may become so in the future.
“In order to continue their mission of ensuring monetary and financial stability, central banks need to keep pace with technological change. The Helvetia project … allows the SNB to deepen its understanding of how to extend the security of central bank funds to tokenized asset markets,” the statement said. Added Andréa M. Maechler, member of the Bank’s Board of Management.
The Swiss National Bank said Helvetia was only an exploratory project, suggesting it should not be viewed as a plan to issue a wholesale CBDC. In December, the SNB, along with the Bank of France and the Bank for International Settlements, implement Another experiment, testing the use of wholesale CBDC in cross-border payments. The Jura project uses distributed ledger technology and is made possible with the support of private sector companies.
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