- The Swiss National Bank has announced the beginning of testing their CBDC with five banks to determine its interoperability.
- The CBDC tests aim to determine how the coin will function within private banks and backed by Bank for International Settlements (BIS).
The Swiss National Bank has announced the beginning of a test phase for their CBDC. The bank revealed that the in-development coin is undergoing tests in a joint effort with five more banks. The tests would help determine how efficient the coin will be according to its interoperability with private banks’ systems.
Swiss Central Bank reveals interoperability tests of the in-development CBDC with private banks
The Swiss Central Bank has confirmed that their in-development CBDC has already helped settle a significant number of transactions. The bank posted a press release yesterday that it is conducting further tests with selected financial institutions.
The press release confirmed that the joint effort is between the SNB, BIS, and SIX. SIX is the capital provider of financial infrastructure developments in Switzerland. It also revealed the five banks that are included in the tests. These banks include Citibank, Goldman Sachs, UBS, Credit Suisse and Hypothekarbank Lenzburg.
The bank also revealed that it spearheaded some tests in Q4 of 2021. It said that these tests were helmed by SIX and touched on interbank and international remittances. The other banks in the joint effort also integrated the CBDC in their remittance system and protocols.
SNB also revealed that the future would see more financial assets tokenized and rely on DLTs for functionality. The authority also expressed that regulators will need to follow up on the tokenized assets.
Switzerland leads the world in crypto adoption
Switzerland has been at the forefront of welcoming and adopting blockchain technologies. Several Swiss banks already have crypto custody licenses, while Swissquote plans to open a crypto exchange. The SNB is also testing its CBDC.
According to SNB, the international monetary standards dictate that financial infrastructure should always solve the needs of a central bank. It added that even though most of the available DLTs are either in development or not that advanced, they may rule the future.
Per an official member of the governing board of the SNB, Central Banks need to be wary of being left behind by technology to continue serving their purpose. The Helvetia project has helped SNB understand how central bank-issued money’s safety could stretch its wings to cover digital tokenization.
However, SNB has warned that the ongoing Helvetia project remains a research project and does not guarantee the issuance of a wholesale CBDC. Last month, the SNB also announced testing the coins’ ability to settle international remittances. It confirmed that the project also attracted private institutions.
It’s not a wonder that Swiss CBDC is under ‘research’ since the country is among the few nations that publicly confess the potential of cryptocurrencies. It has allowed its citizens to freely access the crypto space through its financial institutions. As a result, it serves as a benchmark for other countries that are figuring out whether to support cryptos or not.