The pilot project of Switzerland’s wholesale central bank digital currency (wCBDC) is entering a new phase where the instrument will be tested with six local commercial banks in securities transactions.
The Swiss National Bank (SNB) has unveiled that the digital franc pilot project has moved to a new phase. Helvetia Phase III will test the wCBDC’s effectiveness in settling digital securities transactions.
Six local commercial banks will participate in the new phase of the pilot project, including:
- UBS;
- Commerzbank;
- Basler Kantonalbank;
- Hypothekarbank Lenzburg;
- Zürcher Kantonalbank;
- Banque Cantonale Vaudoise.
The Swiss wCBDC pilot will be deployed on the SIX Digital Exchange (SDX) platform with the Swiss Interbank Clearing infrastructure. The pilot tests for this phase will run from December 2023 to June 2024.
Financial institutions participating in the project will issue digital bonds that will be settled on a Delivery Versus Payment basis, meaning that settlements between the parties will be made simultaneously in cash and securities. All transactions will be settled in wCBDC on the SDX platform.
The main purpose of this pilot test phase is to verify the feasibility of settling primary and secondary market transactions in wCBDC in a real environment.
The transition to a new phase of the Swiss CBDC pilot project was announced by Thomas Jordan, Head of SNB, back in June this year. He stressed that the tests would have clear time limits. The second phase was launched in January 2022 and lasted more than a year and a half.
As for Swiss commercial banks, most of them are actively exploring the use of cryptocurrencies and tokenized assets. It became known that one of the largest local banks, St.Galler Kantonalbank (SGKB), supports Bitcoin (BTC) and Ethereum (ETH) trading due to cooperation with the Swiss crypto bank SEBA.
Swiss financial holding company UBS Asset Management recently began testing tokenization opportunities by participating in Project Guardian together with the Monetary Authority of Singapore (MAS).
