Central Bank Digital Currency Takes Center Stage in Swiss Pilot Project

The Swiss National Bank (SNB) launched a pilot project with six commercial banks to explore the use of a wholesale central bank digital currency (CBDC) for financial institutions on November 2, 2023. The pilot project, called Helvetia Phase III, will run from December 2023 to June 2024 and will involve the issuance of real Swiss franc wholesale CBDC on a financial market infrastructure based on distributed ledger technology (DLT).

 

The pilot project is scheduled to run from December 2023 to June 2024. The participating banks are Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank.

 

“This pilot project is an important step in our research on CBDC,” said SNB Chairman Thomas Jordan. “We are committed to exploring the potential of CBDC to benefit the Swiss economy and financial system.”

 

Evolution of Project Helvetia

Project Helvetia is a multi-phase project that has been exploring the potential of CBDC since 2019.

 

Phase I: Phase I focused on the conceptual design of a wholesale CBDC system.

Phase II: Phase II focused on the development of a prototype wholesale CBDC system.

Phase III: Phase III is the pilot project that is being launched today.

 

Benefits of CBDC

 

CBDC could offer a number of benefits for the financial system, including:

 

• Increased efficiency: CBDC could settle transactions faster and more efficiently than traditional methods.
• Greater transparency: CBDC could make transactions more transparent and traceable.
• Reduced risk: CBDC could reduce the risk of financial instability.

 

The SNB's Commitment to CBDC

 

The SNB is committed to exploring the potential of CBDC and is closely monitoring developments in this area. The pilot project is an important step in this process and will help the SNB to better understand the potential benefits and risks of CBDC.

 

About the SNB

 

The Swiss National Bank is the central bank of Switzerland. Its main tasks are to ensure price stability, to promote the stability of the financial system, and to conduct the country's monetary policy.

 

Objectives of the Pilot Project

 

The objectives of the pilot project are to:

 

• Test the feasibility of using wholesale CBDC to settle transactions between financial institutions.
• Assess the potential benefits of using wholesale CBDC, such as increased efficiency and transparency.
• Identify any potential risks associated with the use of wholesale CBDC.

 

Implications of the Pilot Project

 

The pilot project is a significant step forward in the development of CBDC in Switzerland. If the pilot project is successful, it could pave the way for the introduction of a wholesale CBDC in Switzerland in the future.

 

Source:

https://www.snb.ch/en/publications/communication/press-releases/2023/pre_20231102