SNB successfully completes wholesale CBDC trialwritten by Bella Palmer
The trial, called Project Helvetia, could bring the introduction of central bank digital currencies a step closer in Switzerland
Switzerland’s central bank has successfully used digital currency to settle transactions involving five commercial banks, the Swiss National Bank said on Thursday, in the latest trial of the technology in wholesale markets.
The trial, called Project Helvetia, could bring the introduction of central bank digital currencies a step closer in Switzerland, which has conducted some of the most advanced central bank digital currency (CBDC) experiments in Europe.
Under Helvetia, named after the symbol for Switzerland, the SNB integrated CBDCs into payment systems and used them in simulated transactions in the experiment which involved UBS , Credit Suisse Goldman Sachs Citigroup and Hypothekarbank Lenzburg.
Integrating a wholesale central bank digital currency (CBDC) into existing core banking systems is complex and a key prerequisite for issuance.
The scheme showed it was possible to instantaneously execute payments, which ranged in size from 100,000 to 5 million Swiss francs ($109,469 to $5.47 million), eliminating counter-party risk.
Phase II of Project Helvetia successfully demonstrates that such integration is operationally possible, said Benoît Coeuré, head of the Bank for International Settlements (BIS) Innovation Hub, which also took part in the experiment.
We have demonstrated that innovation can be harnessed to preserve the best elements of the current financial system, including settlement in central bank money, while also potentially unlocking new benefits, said Coeuré.
The project, which took place over three days towards the end of 2021, also involved Swiss stock exchange operator SIX, Switzerland’s main provider of financial infrastructure services.
It involved the issuance and redemption of wholesale CBDCs as well as using them for payments and for the settlement of securities purchases in Switzerland as well as cross-border transactions.
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