Swiss wholesale CBDC pilot kicks off in alliance with central, commercial banks

The Swiss National Bank (SNB), six commercial banks and the SIX Swiss Exchange will work together to pilot the issuance of wholesale central bank digital currencies (CBDCs) in the nation, officially known as the Swiss franc wCBDC.

The pilot project dedicated to wholesale CBDC, named Helvetia Phase III, will test the efficacy of a Swiss Franc wCBDC in settling digital securities transactions. The pilot builds on the findings of the first two phases — Helvetia Phases I and II — conducted by the BIS Innovation Hub, the SNB and SIX.

The six banks involved in the pilot — Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS and Zürcher Kantonalbank — are also existing SIX Digital Exchange (SDX) member banks.

The Swiss wCBDC pilot project will be hosted on SDX and use the infrastructure of Swiss Interbank Clearing. According to the announcement, the pilot will run from December 2023 to June 2024.

“The pilot’s objective is to test, in a live production environment, the settlement of primary and secondary market transactions in wCBDC.”

During this timeframe, participating banks will “issue digital Swiss franc bonds, which will be settled against wCBDC on a delivery-versus-payment basis.” All transactions conducted in this test environment will be collateralized by digital bonds and settled on SDX in wCBDC.

Related: Top Swiss bank launches Bitcoin and Ether trading with SEBA

Parallel to in-house CBDC efforts, the Swiss Financial Market Supervisory Authority, along with the Financial Services Agency of Japan and the United Kingdom’s Financial Conduct Authority, partnered with the Monetary Authority of Singapore (MAS) to conduct various crypto pilot initiatives.

As previously reported by Cointelegraph, the authorities specifically seek to carry out pilots related to fixed income, foreign exchange and asset management products. “As the pilots grow in scale and sophistication, there is a need for closer cross-border collaboration among policymakers and regulators,” the MAS stated.

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