Switzerland launches pilot project for tokenized central bank money

SIX Swiss Exchange, Swiss National Bank (SNB) and six commercial banks are joining forces as part of a pilot project with a focus on tokenized central bank money for financial institutions (also known as wholesale central bank digital currency - wCBDC). The pilot project is set to be launched in December 2023 and will run until June 2024, further details of which can be found in a press release. The six commercial banks involved in the pilot project include Banque Cantonale Vaudoise, Basler Kantonalbank and Zürcher Kantonalbank, as the cantonal banks of the cantons of Vaud, Basel and Zurich respectively, as well as Commerzbank, Hypothekarbank Lenzburg and UBS.

As part of this pilot project by the name of Helvetia Phase III, a real Swiss Franc wCBDC will be used to settle digital securities transactions for the first time. For this, SIX Digital Exchange (SDX) will act as a trusted gateway to host the pilot project on its digital asset platform. The aim is to test the settlement of primary and secondary market transactions in wCBDC within a live production environment. “Switzerland has taken a leading role in this technological evolution”, as David Newns, Head of SDX, explains in the press release.

The participating banks will have the chance to issue digital bonds denominated in Swiss francs, which will be settled against wCBDC on a delivery-versus-payment basis. The Helvetia Phase III project will also be extended to include the settlement of repo transactions.

“Switzerland is at the forefront of digital financial innovation”, comments Jos Dijsselhof, CEO of the SIX Swiss Exchange, in the press release. He takes the view that this collaboration is “testament to our commitment to the future of digital finance and underscores the transformative power of DLT in the financial system”. ce/mm