More than 130 countries, representing 98% of global GDP are exploring Central Bank Digital Currencies (CBDCs) to boost financial inclusion and transaction efficiency. Mathias Studach, Head Finance, Risk & Organizational Development at SIX Digital Exchange (SDX) has shared key insights with CI on these developments. Switzerland is a longtime global finance hub that is at the forefront of advancing the trend and moving toward CBDC adoption.
Project Helvetia, led by the SIX Digital Exchange (SDX) and Swiss National Bank (SNB), is a pilot program focused on integrating Central Bank Digital Currencies (CBDCs) with tokenized securities and digital assets.
The pilot project has been extended for two more years, with Phase III set to thoroughly assess the benefits, operational challenges, and regulatory implications of using CBDCs in real-world financial transactions.
So, how’s Switzerland’s Project Helvetia Phase III poised to shape the future of global finance?
Integrating Traditional and Digital Systems: Project Helvetia’s Phase III will focus on integrating blockchain with Switzerland’s financial infrastructure, ensuring traditional and digital systems work together smoothly. This is key to creating a stable and efficient financial ecosystem as Switzerland leads in adopting highly safe CBDCs.
SIX Digital Exchange (SDX) and Swiss National Bank (SNB) are setting a global standard by being the first to implement strong blockchain regulations for central bank operations.
Phase III will refine these regulations and expand their application, positioning Switzerland as a global model for digital finance.
Since 2020, Project Helvetia has advanced significantly by onboarding six major banks, including UBS, Citi and Goldman Sachs with further global partner expansion planned in the coming months. Phase III will test the wholesale CBDC in complex cross-border transactions, ensuring its viability across major financial institutions.
Our conversation with Mathias Studach, Head Finance, Risk & Organizational Development at SIX Digital Exchange (SDX) is shared below.
Crowdfund Insider: Could you introduce yourself, and provide an overview of SIX Digital Exchange (SDX) and Project Helvetia?
Mathias Studach: I was an SDX co-founder in July 2018, and my current role is Deputy CEO and Head of Finance & Risk. I bring a wealth of experience in financial markets, particularly in managing and implementing enabling technologies, strategy, and financial management.
SDX is the world’s first fully regulated digital exchange and Central Securities Depository on Distributed Ledger Technology (DLT). SDX secured its licenses from the Swiss Regulator (FINMA) in September 2021 and went live with the first-ever digital bond on a fully regulated, blockchain-based FMI in November 2021. Since then, SDX has been at the forefront of financial innovation in Switzerland, achieving cutting-edge industry firsts that are redefining the financial landscape. Project Helvetia is a collaborative initiative involving the Swiss National Bank (SNB), SDX/SIX and selected financial market participants, aimed at exploring how central bank money can be used to settle tokenized assets in a future where financial markets may increasingly rely on DLT and tokenization. In 2023, we made history by settling the first securities transactions in wholesale Central Bank Digital Currencies (wCBDC) on a regulated blockchain-based infrastructure in a production environment.
Crowdfund Insider: What are the advantages of developing a digital currency that’s backed by a centralized bank, like the Swiss National Bank?
Mathias Studach: A wCBDCprovides several critical advantages. It offers a high level of trust and security, as it is issued and guaranteed by central banks, making it free from credit risk and instability associated with privately issued stablecoins or volatile cryptocurrencies.
Additionally, it enables safer and more efficient settlement of transactions by integrating tokenized assets and money on a single platform. Furthermore, a central bank-backed digital currency aligns with existing monetary policy frameworks, offering new tools for managing economic conditions, such as programmable money or tiered interest rates. It also provides central banks with greater visibility into financial activities, balancing innovation with regulatory oversight to ensure financial stability while leveraging the benefits of digital infrastructure.
Crowdfund Insider: Can you explain what makes Project Helvetia and its approach globally unique, particularly in scalability and regulatory innovation compared to other CBDC pilot projects?
Mathias Studach: Project Helvetia is globally unique due to its focus on practical, real-world implementation rather than isolated experimentation. It builds directly on SDX’s fully operational platform for settling digital assets, making it a true production-level initiative. By integrating wholesale central bank digital currency with both traditional financial market infrastructures and DLT, it ensures seamless compatibility between the established financial system and innovative digital solutions.
The project also stands out for its strong collaboration between the public and private sectors, involving the Swiss National Bank (SNB), SIX/SDX, and selected financial market participants. This cooperation ensures that Helvetia is not just a technical proof of concept but a fully compliant initiative, operating under the existing regulatory framework with real money transactions, rather than in a sandbox environment.
Crowdfund Insider: What challenges have you encountered in Phase II of this project, particularly in integrating blockchain with traditional banking systems?
Mathias Studach: The experiment demonstrated the successful integration of a DLT-based system with traditional systems, allowing end-to-end settlement of transactions in wCBDC. By leveraging existing ISO messaging and established processes, the solution design facilitates integration into core banking systems.
While this message-based integration is minimally invasive, it forces both the central bank and commercial banks to deal with a number of multifaceted issues involving the specification of interfaces and messages to establish interoperability between a DLT-based and a traditional system. Furthermore, integrating wCBDC into the core banking systems of both central and commercial banks introduced complexities in managing booking and reconciliation processes due to parallel processes for DLT-based and traditional infrastructures.
Crowdfund Insider: Switzerland has been known for its progressive stance towards digital assets. What are the advantages of basing a program like yours in a nation like Switzerland?
Mathias Studach: Switzerland’s progressive regulatory environment makes it an ideal location for initiatives like SDX and Project Helvetia. The country has established itself as a global financial hub, underpinned by a robust legal and regulatory framework that effectively balances financial innovation with stringent oversight. Swiss regulators, such as FINMA and the SNB, are recognized for their openness to exploring and integrating new technologies while ensuring compliance with high standards of financial stability, customer protection and transparency.
This proactive stance allows for experimentation with cutting-edge digital solutions, including blockchain technology, in a secure and trusted environment. Additionally, Switzerland’s strong banking tradition, coupled with its international reach, positions Project Helvetia well for fostering partnerships with global financial institutions and expanding cross-border applications of wCBDCs.
Crowdfund Insider: With major banks like UBS, Citi, and Goldman Sachs involved in Phase II, what additional partnerships or expansions are planned for Helvetia Pilot, especially for cross-border transactions?
Mathias Studach: As part of the Helvetia Pilot, the Swiss National Bank (SNB) is providing wCBDC on SDX, enabling financial institutions to settle transactions involving digital (token-based) assets directly on the SDX CSD with wCBDC. The Pilot, running until at least June 2026, may be extended based on future assessments.
Initially, more financial institutions will be able to join, and later, the range of financial transactions supported by wCBDC will be broadened.
