Last December, the Swiss and French central banks brilliantly carried out the first cross-border CBDC payment on the European continent. The Swiss side has just recorded a new success in the various experiments leading to the issuance of its own digital currency. It was supported for the occasion by a group of 5 commercial banks in the country. Details later in this article.
Realization of interbank, monetary and cross-border transfers
The new series of tests carried out by the Swiss National Bank (SNB) constitutes the second phase of the Helvetica project. It has had participation from Citigroup Inc., Credit Suisse Group AG, Goldman Sachs Group Inc., Hypothekarbank Lenzburg AG and UBS Group AG. In particular, the five banks have made their commercial architecture available to the SNB for test the circulation of the digital franc. The various tests performed covered a wide range of transactions, including interbank, monetary and cross-border transfers.
The experiment focused on identifying practical complexities, legal issues as well as the political implications of issuing a digital currency. Member of the Board of Directors of the SNB, Andrea Maechler emphasized the security aspect when discussing the main lessons of this second phase. ” The transaction deepened the SNB’s understanding of how the security of the digital franc could be extended to digital financial asset markets“, she said.
When will a CBDC be issued in Switzerland?
In the current state of affairs, there are no immediate plans for a third phase of Project Helvetica according to official sources. Likewise, it is unclear whether Switzerland will allow the issuance of the SNB’s digital currency following the success of the current experiment. “The experience of Project Helvetica remains exploratory in nature and should not be interpreted as an indication that the SNB plans to issue a digital currency“Said the authorities of the SNB.
The Swiss National Bank therefore prefers to play the card of restraint despite the success encountered during the first two test phases around its digital currency. While waiting to define its roadmap, it will be able to look into the risks associated with the interoperability of CBDCs. These were recently discussed by the International Securities Services Association (ISSA) in its latest report entitledBlue Print for CBDC in Post-Trade-Settlement.
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Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in 2017 on a few cryptos only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay with my pen information relating to this ecosystem.