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Swiss digital finance pioneers new era with wholesale CBDC project

A consortium of Swiss financial institutions is set to revolutionize digital financial markets through the launch of Helvetia Phase III, a project aimed at exploring the use of wholesale central bank digital currency (wCBDC). This initiative marks the first time real Swiss Franc wCBDC will be used to settle digital securities transactions.

The project is a collaboration among SIX, the Swiss National Bank (SNB), and six commercial banks, including Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank (ETR:), Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank. The pilot program will run from December 2023 to June 2024.

Transactions will take place on the SIX Digital Exchange (SDX) platform, a leading distributed ledger technology (DLT)-based platform. The infrastructure from Swiss Interbank Clearing SIC and SIX SIS will be utilized, along with the CO:RE trading platform for repo transactions administered by the Triparty Agent of SIX SIS.

The banks will issue digital Swiss Franc bonds settled against wCBDC on a delivery-versus-payment basis using digital bonds eligible for SNB repo transactions. This innovative approach underscores DLT’s potential as a catalyst for digital asset adoption and is likely to shape the trajectory of the global financial industry.

David Newns, Head of SDX, expressed his confidence in the initiative’s potential impact on the financial sector. He stated that this project would usher in a new era of digital finance. The pilot program will assess wCBDC transactions within a live production environment and extend to repo transactions initiated on the CO:RE trading platform.

This initiative builds upon insights gained from earlier phases by BIS Innovation Hub, SNB, SIX. The project’s success could potentially set a precedent for future digital currency initiatives worldwide.

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