The project, named Helvetia Phase III, will involve the use of wholesale CBDC on the SIX Digital Exchange (SDX) platform, a regulated platform based on distributed ledger technology (DLT).
For the first time, the SNB will issue real wholesale CBDC in Swiss francs in a live financial market infrastructure. The transition from test environments to production marks a significant step forward in the bank’s exploration of digital currencies.
The participating banks will facilitate transactions on the DLT platform, acting as intermediaries for issuers and investors, settling tokenised bonds against wholesale CBDC on a delivery-versus-payment basis.
The pilot will run for seven months, from December 2023 to June 2024. The commercial banks involved include Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank.
The project will also utilize the SIC infrastructure for tokenizing central bank money and the SIX SIS infrastructure for integrating with traditional bond settlement systems.
Additionally, the SIX Repo and SDX test systems will be used to explore the trading and settlement of repo transactions with wholesale CBDC.
DLT and tokenized assets have already found applications in some sectors of the regulated financial system, showing potential for increased efficiency and transparency.
With the financial system potentially embracing DLT on a wider scale, central banks face the challenge of determining how token transactions between financial institutions can be settled in central bank money.
The use of central bank money, which carries no counterparty risk, is crucial for maintaining the stability and efficiency of the financial system.
The SNB had previously announced in March 2023 that it would explore three models for settling tokenized asset transactions. The Helvetia Phase III pilot adopts the first model, involving the issuance of wholesale CBDC for settling tokenized assets.
However, this pilot does not signify a commitment from the SNB to permanently introduce wholesale CBDC; instead, it serves as a test bed to explore various settlement models for tokenized assets.
Thomas J. Jordan, Chairman of the Swiss National Bank’s Governing Board, expressed pride in the SNB’s international pioneering role, emphasizing the significance of securely and efficiently settling transactions with tokenized assets on a regulated and productive DLT platform using real wholesale CBDC.