The Swiss National Bank (SNB) is making significant progress in developing a wholesale central bank digital currency (wCBDC) in collaboration with commercial banks and the SIX Digital Exchange (SDX). The introduction of the Swiss Franc wCBDC aims to provide a tokenized central bank money for use by all financial institutions within Switzerland.
The Partnership and Infrastructure
The SNB is partnering with six commercial banks, including Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank, Lenzburg, UBS, and Zürcher Kantonalbank. These banks will leverage the infrastructure of the SDX and Swiss Interbank Clearing (SIC) platforms to facilitate the implementation of the wholesale CBDC.
The central bank’s pilot program, known as Helvetia Phase III, will test the settlement of primary and secondary market transactions using the wholesale CBDC. Additionally, participating banks will have the capability to issue digital Swiss Franc bonds, enabling them to settle digital transactions on a delivery-versus-payment basis.
The Roadmap and Timeline
The completion of the third tranche of the CBDC pilot program is expected to run from December 2023 to June 2024.
This initiative by the Swiss government reflects a growing global trend of exploring the potential of tokenized fiat currencies on distributed ledger technology (DLT) platforms. For instance, the European bloc is actively preparing for the launch of a digital Euro, with the European Central Bank (ECB) beginning its groundwork by November 2023.
Christine Lagarde, Head of the ECB
“The digital Euro is a step towards the future and will be used alongside cash as a payment option within the European Union.”
While there is increasing confidence in the adoption of digital currencies, it is worth noting that the final decision on issuing a tokenized CBDC in the United States lies in the hands of the US Congress. The Vice Chair for Supervision of the Federal Reserve (Fed), Michael Barr, confirmed that the Fed is currently not considering the issuance of a CBDC, but remains in consultation with blockchain experts.
Michael Barr, Vice Chair for Supervision of the Federal Reserve
“The decision on a CBDC lies with the US Congress, but we are actively engaging with blockchain experts to explore the possibilities.”
