Switzerland’s central bank has successfully used a digital currency to settle transactions involving five commercial banks, the Swiss National Bank (SNB) said on Thursday, in the latest test of the technology in wholesale markets.
The trial, called Project Helvetia, could bring the introduction of digital currencies closer to the central bank in Switzerland, which has conducted some of the most advanced central bank digital currency (CBDC) experiments in Europe.
With Helvetia, named after the Swiss symbol, the SNB integrated CBDCs into payment systems and used them in simulated transactions in the experiment involving UBS, Credit Suisse, Goldman Sachs, Citigroup and Hypothekarbank Lenzburg.
The result showed that it was possible to execute payments instantly, ranging from CHF100,000 to CHF5 million ($109,469 to $5.47 million), eliminating counterparty risk.
The project, which took place over three days in late 2021, also involved Swiss stock exchange operator SIX, Switzerland’s leading provider of financial infrastructure services.
While retail CBDCs would be used by households and businesses for day-to-day transactions, wholesale versions could be used to make large-scale payments between banks or other entities with central bank accounts.
Supporters say wholesale CBDCs can also make bond trading — which can take days, with multiple parties involved — more efficient. The group involved in Helvetia will now evaluate the results before deciding on the next steps.
Reference: CNN Brasil
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