BIS, SNB, and SIX Announce Successful Completion of CBDC POC
The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia. The proof-of-concept involved integration of tokenized digital assets and central bank money. This initiative has demonstrated the functional feasibility and legal robustness of settling tokenized assets with a wholesale central bank digital currency, or CBDC, (PoC1) and with linking a distributed ledger technology platform to the existing payment systems (PoC2) in a near-live setup.
Project Helvetia explored the technological and legal feasibility of transferring digital assets through issuing a wholesale CBDC onto a distributed digital asset platform and linking the digital asset platform to the existing wholesale payment system. However, comparing the two proof-of-concepts reveals benefits and challenges. A wholesale CBDC has potential advantages when settling digital assets, yet it would raise major policy and governance hurdles. Linking existing systems to new distributed ledger technology platforms would avoid many of these problems, but would forgo the potential benefits of full integration. The next steps will be to gain a better understanding of the practical complexities and policy implications of wholesale CBDC. Different design choices that allow for trade-offs between risks and benefits need to be explored. Project Helvetia will proceed in two complementary directions: to deepen the project by addressing further functional, operational, and policy questions on the issuance of wholesale CBDC and to broaden future involvement in the project to explore the functioning of a wholesale CBDC across borders and with a diverse set of participants. Project Helvetia was the first wholesale CBDC experiment by SNB and complements the planned launch of SIX Digital Exchange. It is an example of how open collaboration can improve the common understanding of the impact of digital innovation on the future of the financial system.
Related Links
Keywords: International, Europe, Switzerland, Banking, Project Helvetia, CBDC, Cross-Border Payments, Blockchain, Digital Currencies, BIS Innovation Hub, SNB, BIS
Related Articles
ESAs Issue Multiple Regulatory Updates for Financial Sector Entities
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
EBA Finalizes Methodology for Stress Tests, Issues Other Updates
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
OSFI Sets Out Work Priorities and Reporting Updates for Banks
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
APRA Finalizes Changes to Capital Framework, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
BIS Hub and Central Banks Conduct CBDC and DeFI Pilots
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)
