Swiss National Bank Trials CBDC in Transactions With Five Banks – Finance Bitcoin News

According to the announcement by the Swiss National Bank, a wholesale CBDC was successfully used by five banks in order to settle transaction with them. The tests are part of an experiment carried out together with the Bank for International Settlements and Switzerland’s financial services provider SIX.

Swiss Central Bank tests integration of wholesale CBDC settlement with private banks

The second phase of Project Helvetia saw a variety of transactions that involved digital currencies (CBDCs) from central banks. This was revealed by the Swiss National Bank (SNB), in a release on Thursday.

These trials were conducted in collaboration between SIX and the Bank for International Settlements, SIX, and the SNB. Five commercial banks also participated – Citi, Credit Suisse, Goldman Sachs, Hypothekarbank Lenzburg, and UBS.

This experiment was conducted in the fourth quarter of 2021 and examined the settlement of cross-border, monetary and interbank transactions using the SIX Digital Exchange system (SDX), SIX Interbank Clearing System (SIC) and other core banking systems.

A wholesale CBDC was integrated into the back-office processes and systems of all banks, including the Swiss central bank. SNB notes the fact that financial assets such as financial instruments will increasingly be tokenized in future. Financial infrastructures, however, will operate on distributed ledger tech (DLT). According to the authority, regulators might need to include tokenized asset market markets in their monetary policy.

The international regulatory standard states that systemically significant infrastructure operators must settle their debts in central bank currency whenever possible. Even though none of these DLT-based platforms is yet systemic, there are possibilities that they could be in the near future.

“To continue fulfilling their mandates of ensuring monetary and financial stability, central banks need to stay on top of technological change. Project Helvetia… allowed the SNB to deepen its understanding of how the safety of central bank money could be extended to tokenized asset markets,” added Andréa M. Maechler, member of the bank’s governing board.

Helvetia was described by the Swiss National Bank as an exploratory project. It should not be considered a plan to issue wholesale CBDCs. The SNB and the Bank of France conducted a second experiment in December to test the use of wholesale CBDC for cross-border payments. Project Jura used DLT, and was supported by private sector businesses.

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BIS, CBDC Central Bank Cryptocurrencies Cryptocurrencies Digital Currency Digital Currency DIstributed Ledger DLT Experiment Helvetia Jura.. project, SDX six, SNB Swiss National Bank Switzerland, Switzerland, Test and Trial Wholesale CBDC

Are you optimistic that the Swiss National Bank will eventually issue wholesale CBDCs? Please let us know your thoughts in the comment section.

Lubomir Tatsev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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