Switzerland is set to pilot a Central Bank Digital Currency (CBDC) in collaboration with six commercial banks, marking a significant step in the exploration of digital currencies. The Swiss National Bank (SNB) will conduct the pilot program on the SIX Digital Exchange (SDX) from December 2023 to June 2024. The project, known as Helvetia Phase III, includes the participation of Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank.
Purpose of the Pilot
The pilot aims to demonstrate the secure and efficient settlement of transactions with tokenized assets on a regulated and productive Distributed Ledger Technology (DLT) platform, using a wholesale Central Bank Digital Currency. It focuses on facilitating real bond transactions and exploring the trading and settlement of repo transactions with wholesale CBDC.
The Swiss Franc in Digital Form
The CBDC in this pilot will represent the Swiss franc and will be available for the settlement of real bond transactions. It provides an opportunity to evaluate the practical use of a digital Swiss franc for wholesale transactions.
No Commitment to Permanent Implementation
The SNB emphasized that the pilot project does not constitute a commitment to permanently introduce the digital state-controlled currency. This statement underlines the cautious approach taken by central banks when considering CBDCs. The SNB has previously expressed concerns about the digital version of the Swiss franc, and its officials have stated that they see no compelling advantage in introducing digital central bank money.