Today Thomas Jordan, Chairman of the Swiss National Bank Governing Board, outlined the pros and cons of wholesale central bank digital currency (wholesale CBDC) at the BIS Innovation Hub Summit. The SNB is currently conducting live pilots as part of Project Helvetia III, in which the digital Swiss Franc is being tokenized on the SIX Digital Exchange (SDX) and used for settlement.
Helvetia III is unique in many ways. Firstly, it uses a production DLT financial market infrastructure, which is a rarity and makes for a better pilot. Another is the issuance of the CBDC on a third party platform, which is where governance is critical in order to give the central bank the control and monitoring capability it desires. Governance was one of two wholesale CBDC challenges outlined by Chairman Jordan.
SDX is part of the SIX group, which also operates the country’s real time gross settlement (RTGS) system, SIC. Hence, it is dealing with a group that already has a significant track record with the central bank, lowering it’s risk. We’d also observe that before the wholesale CBDC, SDX was privately tokenizing cash from its central bank account using the same system, reducing the risk even further.
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