Switzerland’s CBDC Partnership Aims to Transform Financial Settlement

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Central banks around the world have been exploring the potential of CBDCs, or central bank digital currencies. While many are still in early research phases, Switzerland is taking things to the next level with an innovative wholesale CBDC pilot. Let’s take a deeper look at what they have in store.

Partnering for Progress

In a joint effort between the Swiss National Bank (SNB), SIX Digital Exchange (SDX), and six major Swiss commercial banks, the Helvetia Phase III pilot aims to test the use of a tokenized Swiss franc for financial transactions. Run from December 2023 through June 2024, it will be hosted on SDX infrastructure and use the existing Swiss Interbank Clearing system.

Unlike previous pilots focused on research, this ambitious project plans to facilitate real transactions using wholesale CBDC in a live production environment. The banks involved will issue digital franc bonds and settle primary and secondary market deals using CBDC on a delivery-versus-payment basis. It’s an exciting chance to put digital currency theory into tangible practice.

Leading through Collaboration

Switzerland's CBDC

No single entity could take on such a large-scale pilot alone. The SNB brings central bank authority, while SDX provides its regulated distributed ledger platform. Adding experienced commercial banks lends valuable perspective from the private sector. It’s a textbook example of productive cooperation between public and private stakeholders.

As Jos Dijsselhof, CEO of SIX, remarked: “Switzerland is at the forefront of digital financial innovation.” By working together cross-institutionally, they seek to shape the technology’s role in modern finance. The inclusive, consensus-based nature of the Helvetia project sets an excellent example for other jurisdictions to follow as interest in CBDCs continues to grow.

Real-World Results

Throughput the various planned transactions, participants hope to gain valuable insights into democratic current account money in digital form. Key questions around efficiency, transparency and scalability can be empirically explored. Perhaps most intriguingly, it will offer a glimpse of how tokenized securities and short-term assets might interface with a CBDC settlement layer.

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