The Swiss National Bank (SNB) is partnering with six commercial banks and six Swiss exchanges to initiate a joint pilot project involving the issuance of a wholesale Central Bank Digital Currency (CBDC) in Switzerland. This wholesale CBDC, officially referred to as the Swiss franc wCBDC, will be subject to an extensive pilot test within a project named Helvetia Phase III. The primary focus of this test is to evaluate the Swiss franc wCBDC's effectiveness in settling transactions involving digital securities.
The Helvetia Phase III project will continue the research efforts from its two preceding phases, which were conducted in collaboration with the Bank for International Settlements Innovation Centre, the Swiss National Bank, and the Swiss Six Nations Bank. The pilot project is scheduled to run from December 2023 to June 2024. Its primary objective is to assess the settlement of primary and secondary market transactions using the wCBDC in a live production environment.
Six prominent banks will participate in this pilot, including Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank, all of which are also members of the Swiss Digital Exchange (SDX). The pilot will be hosted on the SDX and will utilize the infrastructure provided by the Swiss Interbank Clearing House. During the pilot phase, participating banks will issue digital Swiss franc bonds that will be settled using the wCBDC based on a payment-for-delivery basis. Notably, all transactions conducted during this testing period will be collateralized by digital bonds and SDX in wCBDC for settlement purposes.
In parallel with the development of this in-house CBDC, regulatory authorities such as the Swiss Financial Market Supervisory Authority, Japan's Financial Services Agency, and the UK's Financial Conduct Authority have partnered with the Monetary Authority of Singapore (MAS) to initiate various pilot programs related to cryptocurrency. These pilots are geared towards exploring fixed income, foreign exchange, and asset management products, marking a significant stride in the development of blockchain technology in the financial sector. Collaboration between policymakers and regulators across borders is expected to grow as these pilot programs increase in scale and complexity, emphasizing the need for greater international cooperation in the realm of blockchain technology.
