Blockchain for Banking News

Swiss wholesale CBDC trial with SDX extended by 2 years

helvetia wholesale CBDC SDX

Today the Swiss National Bank (SNB) announced it is extending Project Helvetia III, its wholesale central bank digital currency (wholesale CBDC) pilot, for ‘at least’ two years. Since December 2023, six digital bond issuances totaling CHF 750 million ($842m) used the SNB’s digital Swiss Franc for settlement on the SIX Digital Exchange (SDX). The pilot was due to end later this month. “Project Helvetia III has been very successful to date,” the central bank said.

The SNB also made a groundbreaking announcement about executing a world-first in monetary policy operations. Earlier this month, it issued CHF 64 million in SNB Bills on the SDX DLT platform. These bills had a one-week maturity. This follows several other world firsts for SDX. They include the first regulated DLT exchange and central securities depository (CSD), the first integration between a DLT CSD and a conventional CSD (SIX SIS), and the first production wholesale CBDC transactions.

Around the same time, the World Bank issued a CHF 200 million bond. Additionally, UBS issued a second digital bond of CHF 150 million, following its first SDX digital bond of CHF 375m in 2022. With this month’s activity, the total issuances on the SDX platform have passed the CHF 1.3 billion ($1.5bn) mark.

“Robust and scalable financial market infrastructure requires that wholesale transactions be settled in central bank money, the safest form of money,” said the Head of SDX, David Newns. “To fully utilize blockchain’s potential, both the tokenized investment and the settlement asset must be on the same chain. Project Helvetia III demonstrated that SDX can meet these requirements.”

Project Helvetia next steps

The next stage of the pilot will expand the number of institutions involved and the range of financial market transactions. So far six banks participated in the pilot: Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS and Zürcher Kantonalbank. To date SDX has only been used to settle bonds.

By the end of the next stage, the assessment of success will include these two factors and issuance volume. The SNB was keen to emphasize that it is still not making a permanent commitment to wholesale CBDC issuance or digital SNB Bills.

Correction: a previous version erroneously stated the SNB Bills amounted to CHF 64 billion when it was CHF 64 million.