The Swiss National Bank (SNB) is working on a pilot project for a central bank digital currency or CBDC Wholesale. To do this, it collaborates with the SIX Digital Exchange (SDX) as well as six commercial banks. The pilot, named Helvetia Phase III, will create a tokenized version of the Swiss franc. This crypto asset will serve as a settlement instrument between financial institutions for digital securities transactions on the SDX.
The advantages of CBDC for financial transactions
We exclusively use CBDC Wholesale as means of transferring money between financial institutions. It therefore differs from a retail CBDC, which is available to consumers as a digital currency.
“Eurozone central banks draw up plans for CBDC Wholesale”, the governor of the French central bank said last month.
The potential benefits of a CBDC Wholesale include reduced costs and payment times for international financial transactions. Wholesale CBDCs can also improve the efficiency of cross-border payments, in addition to reducing the risks associated with international financial transactions.
Helvetia Phase III: tokenization of the Swiss Franc for crypto transactions
The Helvetia Phase III pilot will create a tokenized version of the Swiss franc. This crypto currency will serve as a settlement instrument between financial institutions for digital securities transactions on the SDX.
The six commercial banks involved in the crypto and CBDC project were selected for their expertise in the field of digital transactions and their ability to provide innovative financial services.
The pilot project will take place over a period of six months. It will allow participants to explore the potential benefits of a CBDC Wholesale for digital transactions.
The Helvetia Phase III pilot is a step towards the adoption of a Wholesale CBDC by the SNB. However, the results will need to be closely monitored. The latter will certainly influence the final decision of the BNS (i.e. a future adoption of CBDC Wholesale).
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