Member of the Governing Board Antoine Martin announced that the Swiss National Bank has chosen to extend its wholesale central bank digital currency (CBDC) pilot for another two years.
Antoine Martin described the project as “very successful” following the SNB’s interest-rate decision in Zurich on Thursday, and as a result, the extension plan comes. He also said SNB hopes that the project will be broaden to include more financial institutions and a wider range of financial transactions.
The project began last year and is scheduled to end on June 30. In the initial phase, the SNB issued digital currency on a blockchain. Financial institutions can use these tokenized assets for transactions with the central bank.
However, this digital currency is not accessible to consumers which makes it different from other digital-currency initiatives like those in China, which are geared toward retail use.
Martin emphasized that future developments regarding the pilot project’s viability will primarily rely on the number of new financial market participants, the volume of transactions, and the settlement of new financial market transactions on this platform.
However, he added, “the SNB does not constitute a commitment on the part of the SNB to introduce wholesale CBDC or digital SNB Bills on a permanent basis” by agreeing to prolong the pilot.
While most central banks worldwide are developing CBDCs, few are as progressive as the SNB, and the Swiss wholesale attempt is a first for the world, as SNB President Thomas Jordan has stated.
The digital franc has settled over 1 billion francs in digital assets at SIX’s digital exchange in Zurich, including a recent 200 million-franc World Bank bond.
The project is receiving international attention, as evidenced by the World Bank security being the first digital bond issued by a global entity in francs. The Swiss cities, banks, and cantons are among the other issuers.
Six commercial banks, including UBS Group AG and Commerzbank AG, are testing the currency in collaboration with SIX, based on research from the Bank for International Settlements.
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