Swiss central bank tests wholesale CBDC with commercial partners


Switzerland has taken a further step to clarify the roadmap for the integration of central bank digital currencies (CBDCs) into the current financial system.

The Swiss National Bank (SNB), the country’s central bank, has completed the second phase of the Helvetia project with its partners by integrating the wholesale CBDC into the existing back-office systems and processes of five banks, namely Citi, Credit Switzerland, Goldman Sachs, Hypothekarbank Lenzburg and UBS.

The Bank for International Settlements and the Swiss financial infrastructure service provider SIX joined as partners of the SNB in ​​Phase II of the Helvetia project, which took place during the fourth quarter of 2021.

Envisioned as a multi-phase investigation into the settlement of tokenized assets in central bank money, Project Helvetia aims to prepare central banks for a future where DLT-based tokenized financial assets will be the norm. The project focuses on solving operational, legal and political issues related to settlements. The official announcement states that the absence of a DLT-based systemic platform does not mean that there will not be such platforms in the future.

Switzerland was an ideal country to continue the experiment since issuing a wholesale CBDC, which is specifically used to settle interbank wire transfers and related wholesale transactions, on a distributed DLT platform operated and owned by a private company is possible under the law.

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

“To continue to fulfill their mandate of monetary and financial stability, central banks must stay abreast of technological changes,” said Andrea M. Maechler, member of the SNB Board of Directors. She continued:

“The Helvetia project is an excellent example of how to achieve this. This allowed the SNB to deepen its understanding of how central bank money safety could be extended to token asset markets.

The first phase of the Helvetia project took place in December 2020 and focused on issuing a wholesale CBDC.