Swiss National Bank and BIS complete digital currency proofs-of-concept

Published at: Dec. 4, 2020

The Bank for International Settlements and the Swiss National Bank and are exploring the benefits of implementing a central bank digital currency, or CBDC, using blockchain technology.

According to a Dec. 3 announcement, the BIS Innovation Hub Swiss Centre, or BISIH, has successfully completed two proofs-of-concept linking existing payment systems to a distributed ledger and settling tokenized assets with a wholesale CBDC.

Known as “Project Helvetia,” the new initiative is a joint venture from the BISIH, the SNB and Switzerland’s top stock exchange, Six Group.

The exchange stated that Project Helvetia explored the technological and legal feasibility of transferring digital assets through issuing a wholesale CBDC onto Six’s proprietary distributed digital asset platform, Six Digital Exchange. The new platform is expected to launch in the near future, offering issuance, trading, settlement, management and custody of tokenized assets.

The experiment should not be interpreted as an indication that Switzerland’s central bank will issue a wholesale CBDC, the financial institutions noted.

Andréa Maechler, a member of the SNB’s governing board, emphasized that the Swiss central bank does not want to miss opportunities to improve the financial system with emerging technologies:

“Irrespective of which technologies the financial markets adopt next, the safety and reliability of Swiss financial infrastructure must be preserved. If [distributed ledger technology] can deliver significant improvements in securities trading and settlement, then the SNB will be prepared.”

While Project Helvetia appears to show that DLT has the potential to be a useful tool in the future of the financial system and CBDCs, there is still no clear consensus over whether the technology is necessary for launching a CBDC. In September 2020, executives at the SNB and Deutsche Bundesbank seemed to agree that global retail CBDC projects do not need blockchain.

Tags
Technology
Blockchain
Digital Currency
Government
Fiat Money
Central Bank
Cbdc
Switzerland
Swiss Franc
Swiss National Bank
Related Posts
Blockchain not suitable for CBDC, says Swiss national bank economist
Blockchain, the underlying technology of cryptocurrencies like Bitcoin (BTC), is not the right solution for a central bank digital currency, according to an economist at Switzerland’s central bank. Carlos Lenz, chief economist at the Swiss National Bank, argued that blockchain-based decentralization features are not efficient for a state-controlled digital currencies like a digital franc, German-language Swiss newspaper The Handelszeitung reported Thursday. The economist reportedly noted that there is a large number of technological opportunities for building a digital franc. “One could imagine a direct account with the National Bank. Not that we want to do that, but that would be …
Technology / June 25, 2021
Six Major Central Banks to Collaborate on Digital Currency Research
The central banks of Canada, the United Kingdom, Japan, European Union, Sweden and Switzerland created a group with the Bank for International Settlements (BIS) to jointly research central bank digital currencies (CBDC). According to a press release published by the Bank of England on Jan. 21, the aforementioned institutions will share their experience with other group members as they study potential use cases for CBDCs in their respective jurisdictions. The announcement states: “The group will assess CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies. It will closely coordinate …
Blockchain / Jan. 21, 2020
France and Singapore pilot cross-border CBDC transactions
Financial authorities in France and Singapore are actively exploring the cross-border applications of central bank digital currencies (CBDCs). In a joint announcement on Thursday, the Bank of France and the Monetary Authority of Singapore (MAS) said that they successfully completed a whole cross-border payment and settlement experiment using CBDCs and blockchain technology. The CBDC experiment was conducted with support and expertise from JPMorgan's digital currency-focused Onyx division on a permissioned, privacy-enabled blockchain based on the investment bank's Quorum blockchain infrastructure. As part of the experiment, the Bank of France and MAS simulated cross-border and cross-currency transactions for a Singapore dollar-based …
Technology / July 8, 2021
Singapore to Explore Central Bank Digital Currency With China
Singapore's central bank and financial regulatory authority is looking to cooperate with China in the field of central bank digital money. Ravi Menon, the managing director of the Monetary Authority of Singapore, or MAS, has voiced the country’s readiness to enter into a close cooperation with China in relation to digital currencies. Speaking at a financial forum in Shanghai, Menon highlighted China’s progress in the development of its central bank digital currency, or CBDC, known as the digital yuan. Singapore, which is also actively exploring blockchain-based CBDCs, is looking to exchange related knowledge and expertise with China, Sina Finance reports …
Technology / June 19, 2020
Major Central Banks to Discuss Digital Currencies Amid IMF Conference
Six major central banks will meet in April to discuss the development of central bank digital currencies (CBDC). The Japan Times reported on Feb. 6 that — according to a source familiar with the matter — the meeting will see the governors of several central banks discuss joint research on CBDCs. Furthermore, the group will share considerations on possible challenges such as cross-currency settlement and cybersecurity. The central banks of the European Union, the United Kingdom, Canada, Japan, Sweden and Switzerland will reportedly meet in Washington D.C., when the participants will be there for an International Monetary Fund conference. The …
Blockchain / Feb. 6, 2020