Bank of Switzerland ready to launch CBDC in January
The Swiss National Bank (SNB) has completed testing of the wholesale central bank digital currency (wCBDC). Governing board member Thomas Moser said in an interview with CoinDesk that the technical launch could take place in January 2022, using Switzerland’s newly licensed Six Digital Exchange (SDX).
An experiment within Project Helvetia with the support of the Bank for International Settlements (BIS) was launched in 2019. In addition, SNB has been working with Banque de France on cross-border wCBDCs this year, known as Project Jura.
In December 2020, the BIS reported on the success of the first phase of Project Helvetia.
Project Helvetia shows the feasibility of two proofs-of-concept, using near-live systems to settle digital assets on a distributed ledger with central bank money #BISInnovationHub #CBDC #Fintech #DLT @SNB_BNS_en @SDX_global @sixgroup https://t.co/dwIlt13W8N pic.twitter.com/j9heAH10t7— Bank for International Settlements (@BIS_org) December 3, 2020
By now, the second phase of Helvetia has been completed. It involved the integration of wCBDC into core systems of five participating banks. The participating banks have not been named but previously SDX was reported to be testing its systems with Citibank, JPMorgan and Credit Suisse.
The missing piece in the testing was the required licenses from Swiss markets regulator FINMA to operate SDX. In September, the platform finally received them. The first live transactions will take place in November. The report on the results of the second phase will be published in January.
According to CoinDesk, the combination of digital cash and distributed ledger technology (DLT) – SDX is being built using R3′s permissioned Corda network – allows for “atomic settlement” where the transfer of one asset (a tokenized security, for example) is conditional on cash being transferred at the same time.
"Everyone complains about T+1 and T+2, which, of course, is slow. But it gives banks time to do liquidity management. Atomic settlement makes the liquidity management for banks more complicated, and there are still interesting questions about costs and benefits," Moser said.
The official also noted that the regulator gives preference to CBDCs over stablecoins, although not against the latter in general.
"The reason is that with a stablecoin you always have the counterparty risk of the issuer. So if SDX should become a huge success and systemically important, then it would be a real question for us whether we want to provide the money there ourselves, the wCBDC. Instead of having a private company provide its own money," Moser said.
Earlier in June, SNB chief economist Carlos Lenz said the institution had no plans to issue a digital franc, although it was conducting research on CBDC.
Nationalbank: Blockchain ist ungeeignet für digitales Zentralbankengeld https://t.co/Rhf0uAowcm— Handelszeitung (@Handelszeitung) June 24, 2021