Crypto

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

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.

This post first appeared here: https://cointelegraph.com/news/swiss-national-bank-and-bis-complete-digital-currency-proofs-of-concept

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