The Swiss National Bank has successfully conducted the second stage of the digital franc testing.
The Swiss National Bank (SNB) completed the second phase of its digital franc testing in December, Bloomberg reported. Five major commercial banks integrated the wholesale CBDC into their existing business processes within three days.
The following banks participated in the testing:
- Credit Suisse;
- Goldman Sachs;
- Hypothekarbank Lenzburg.
The digital franc was involved in a wide range of transactions. Interbank, monetary and cross-border transfers were performed.
The second phase of testing was part of a joint project with the Bank for International Settlements “Helvetica.” This study aims to identify practical and legal difficulties and assess the political implications of issuing the central bank digital currency (CBDC).
SNB’s further plans have not yet been announced. Perhaps the third phase of testing will follow, or a decision will be made on full CBDC issuance. As originally conceived by the SNB, the digital franc is a wholesale CBDC and will be available only to financial institutions and securities transactions.
Recall that the first phase of testing was conducted in 2020 and included the creation of a prototype cryptocurrency exchange SDX and experiments with the SDX Coin stablecoin, secured at a one-to-one rate by traditional Swiss francs. SIX Group was the technical partner of the project. As a result, it was found that the digital franc project is feasible and can be integrated into the traditional financial infrastructure.
In December 2020, the Swiss National Bank applied to the Swiss Federal Institute of Intellectual Property for registration of the trademark “digital franc” under the names “E-Franken,” “Digitaler Franken” and “Digitaler Schweizer Franken.”