RLP Blog

Swiss National Bank Launches Pilot Project for Wholesale Central Bank Digital Currency

The Swiss National Bank is commencing a groundbreaking pilot project alongside six commercial banks, introducing wholesale central bank digital currency for financial institutions.

🇨🇭 Key Points:

𝐎𝐛𝐣𝐞𝐜𝐭𝐢𝐯𝐞: The pilot, known as Helvetia Phase III, marks the SNB's maiden venture into issuing real wholesale CBDC in Swiss francs on a DLT-based financial market infrastructure. This move signifies a shift from test environments to practical implementation, allowing wholesale CBDC for the settlement of genuine bond transactions.

𝐏𝐫𝐨𝐣𝐞𝐜𝐭 𝐒𝐜𝐨𝐩𝐞: The pilot runs from December 2023 to June 2024 and involves the participation of six banks:

1) BCV - Banque Cantonale Vaudoise,

2) Basler Kantonalbank,

3) Commerzbank AG,

4) Hypothekarbank Lenzburg AG,

5) UBS, and

6) Zürcher Kantonalbank.

The project utilizes the SDX platform, SIC infrastructure, and SIX SIS for tokenization and integration with the traditional bond settlement infrastructure.

𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐅𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤: Banks involved in the pilot will function as intermediaries for issuers and investors, conducting transactions on the DLT platform. Tokenized bonds will be settled against wholesale CBDC on a delivery-versus-payment basis, ensuring secure and efficient transactions.

𝐃𝐋𝐓 𝐚𝐧𝐝 𝐓𝐨𝐤𝐞𝐧𝐢𝐳𝐞𝐝 𝐀𝐬𝐬𝐞𝐭𝐬: The use of DLT and tokenized assets within the regulated financial system promises efficiency gains and increased transparency. Central banks are exploring how token transactions between financial institutions can be settled in central bank money, ensuring stability and efficiency in the financial system.

𝐒𝐞𝐭𝐭𝐥𝐞𝐦𝐞𝐧𝐭 𝐌𝐨𝐝𝐞𝐥𝐬: Earlier in March 2023, the SNB announced the examination of three models for settling tokenized asset transactions. The upcoming pilot adopts the issuance of wholesale CBDC for settling tokenized assets, building on earlier findings from Project Helvetia phases.

The pilot project does not signify a commitment to introduce wholesale CBDC permanently. Rather, it aims to test different settlement models for tokenized assets.