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
EBA Finalizes Remuneration Standards for Investment Firms in EU
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
ECA Recommends Actions to Enhance Resolution Planning for Banks
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA Proposes Rules on Identity Verification of Depositor Protection
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB Publishes Work Program for 2021
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA Issues Update on Move to New Data Collection Platform
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank Publishes Derivation Rules for Reporting by Banks
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs Publish Reporting Templates for Financial Conglomerates
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
