SNB and Commercial Banks Initiate Pilot Program for Real Wholesale CBDC Issuance

The Swiss National Bank (SNB), in collaboration with six commercial banks, including UBS and Commerzbank, is set to launch a pilot program focused on issuing a ‘real’ wholesale central bank digital currency (CBDC) as part of the third phase of Project Helvetia, which will commence in December. This initiative, announced recently, aims to investigate the role of central bank money within a tokenized financial framework by the year 2024.

Phase III of this project will have the participating banks serving as intermediaries between issuers and investors on the regulated DLT platform of the SIX Digital Exchange (SDX). The plan is to utilize actual Swiss Franc wholesale CBDC to facilitate the settlement of digital bond transactions on a delivery-versus-payment basis, running from December 2023 through June 2024.

Additionally, this phase includes testing one of the three models that the SNB intends to evaluate for settling tokenized asset transactions. The project will employ the SDX platform alongside the SIX Interbank Clearing system and SIX SIS for various services, which encompass issuance, trading, custody of digital securities, tokenization of central bank funds, and integration with conventional bond settlement systems.

The scope of the project also extends to utilizing the SIX Repo and SDX test platforms for repo transactions while exploring wholesale CBDC applications. The Swiss Financial Innovation Desk is actively backing these forward-thinking initiatives.

A notable achievement within the project is the recent approval by the SNB for Lugano’s digital bond issuance to be included in its ‘General Collateral Basket’, marking its entry into the Swiss Bond Index. This milestone emphasizes the increasing acceptance of digital bond issuances in the traditional financial landscape.

(Note: This article was generated with AI assistance and has been reviewed by an editor.)