Swiss National Bank to Collaborate with Commercial Banks and SDX on Wholesale CBDC Pilot

SNB said that all transactions conducted during this test phase will be secured by digital bonds and settled on SDX using the wCBDC framework.

The Swiss National Bank (SNB) has announced its partnership with SIX Digital Exchange (SDX) and other prominent commercial banks in Switzerland for the initiation of a pilot project aimed at testing the issuance of wholesale central bank digital currencies (wCBDCs) within the nation.

The pilot program, called Helvetia Phase III, marks the first step in exploring the potential of CBDCs in the country for settling digital security transactions.

SNB to Kickoff wCBDC Testing in December

According to the official announcement on Thursday, the CBDC testing will see the participation of other major commercial banks in Switzerland, such as Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank.

These financial institutions will work alongside the SNB and the SIX Swiss Exchange to test the practicality of settling digital securities transactions using a digital Swiss franc (wCBDC) framework.

“Switzerland is at the forefront of digital financial innovation. This collaboration between SIX, the Swiss National Bank, and six commercial banks on the pilot operation for tokenized central bank money is a pioneering leap. It’s a testament to our commitment to the future of digital finance and underscores the transformative power of DLT in the financial system,” said Jos Dijsselhof, CEO of SIX.

Set to be hosted on the SDX platform and leveraging the infrastructure of the Swiss Interbank Clearing (SIC), the pilot program is scheduled to operate over a span of six months, commencing at an undisclosed date on December 2023 to June 2024. The primary objective of the pilot initiative is to evaluate the efficiency and reliability of settling both primary and secondary market transactions using the wCBDC mechanism.

Throughout the pilot phase, the participating banks will have the opportunity to issue digital Swiss franc bonds, with all transactions to be settled on the SDX platform using wCBDC in a delivery-versus-payment arrangement.

SNB said that all transactions conducted during this test phase will be secured by digital bonds and settled on SDX using the wCBDC framework.

Swiss Authorities Partners Other Regulators for Digital Asset Products

In parallel with these initiatives, other regulatory bodies worldwide have also embarked on similar pilot initiatives to explore the potential applications of central bank digital currencies.

Earlier this week, the Swiss Financial Market Supervisory Authority (FINMA) joined forces with the Monetary Authority of Singapore (MAS), the Financial Services Agency of Japan (FSA), and the United Kingdom’s Financial Conduct Authority (FCA) to delve into various aspects of digital asset management products and foster closer cross-border collaborations among policymakers and regulators.

The authorities plan to focus on conducting pilots concerning fixed income, foreign exchange, and asset management products.

MAS said at the time that as “the pilots grow in scale and sophistication, there is a need for closer cross-border collaboration between policymakers and regulators.”

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