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Today the Bank for International Settlements (BIS) published the results of a wholesale central bank digital currency (wCBDC) experiment by the Swiss National Bank (SNB), Project Helvetia Phase II. The research was conducted with the Swiss stock exchange SIX on a test version of its blockchain-based SIX Digital Exchange (SDX) network, the regulated digital asset platform. The central bank has not decided to issue a wholesale CBDC that is only available to banks, not consumers.
A key objective of the tests was to enable interoperability between the DLT solution and existing banking systems at both the central bank and commercial banks.
Five commercial banks were involved in the experiments, Citi, Credit Suisse, Goldman Sachs, Hypothekarbank Lenzburg and UBS. Plus, it integrated with Swiss real time gross settlement (RTGS) system SIX Interbank Clearing (SIC) as well as the banks’ core banking systems.
“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 Benoit C?ure, the outgoing Head of the BIS Innovation Hub. C?ure has been confirmed as the next head of France’s competition regulator. “As DLT goes mainstream, this will become more relevant than ever,” he added.
The trial involved interbank transactions, including settlement for digital asset trades. Additionally, the central bank tested monetary policy and cross-border transactions – last year, a separate report was published on trials with the Banque de France.
In this case, the central bank issued the Swiss Francs directly onto the test SDX platform, where SIX was in control of the notary nodes, but the central bank made decisions. It was also an overnight wCBDC which means that transactions could continue 24/7. However, clearly this creates challenges when integrating with existing systems.
More to follow.
