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.
Keywords: International, Europe, Switzerland, Banking, Project Helvetia, CBDC, Cross-Border Payments, Blockchain, Digital Currencies, BIS Innovation Hub, SNB, BIS
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