Switzerland’s National Bank (SNB) has approved a wide swath of transactions involving central bank digital currency (CBDC), the country’s monetary authority announced.
The Zurich-based regulator said the digital tokens were integrated into back-office systems and processes for five commercial banks during the second phase of Project Helvetia.
The multi-phase initiative by the SNB, the BIS Innovation Hub, whose mission is to identify trends in technology affecting central banking, and SIX, the financial infrastructure operator, was created to explore how central banks could offer settlement in central bank money with tokenized financial assets based on distributed ledger technology (DLT), focusing on operational, legal and policy questions.
Citi, Credit Suisse, Goldman Sachs, Hypothekarbank Lenzburg and UBS participated in the exercise during the fourth quarter of last year to explore the settlement of interbank, monetary policy and cross-border transactions.
As a result, SNB said more financial assets will be tokenized.
“We have demonstrated that innovation can be harnessed to preserve the best elements of the current financial system, including settlement in central bank money, while also potentially unlocking new benefits,” said Benoît Cœuré, head of the BIS Innovation Hub, in a statement. “As DLT goes mainstream, this will become more relevant than ever.”
Last week, PYMNTS reported it’s no surprise that central banks have increasingly been following China’s progress in debuting a digital yuan and have been pivoting toward launching CBDCs of their own. A flurry of activity in the first few weeks of the new year have also come from the private sector as well.
Visa said it is collaborating with blockchain software company ConsenSys to launch a central bank digital currency pilot program to test retail applications including cards and wallets. Visa has followed Mastercard’s 2020 example of a CBDC test platform that enabled banks to simulate the issuance, distribution and exchange of CBDCs between banks, financial service providers.
Read More: Visa, Swiss Central Bank Efforts Latest Examples of 2022 CBDC Push
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