The Swiss National Bank has worked with some leading financial institutions globally to look into central bank digital currencies (CBDCs). Through this partnership, the institution successfully integrated CBDCs into the banking system.
Besides the Swiss National Bank, the other institutions in this project included Citigroup Inc, Credit Suisse Group AG, Goldman Sachs Group Inc, Hypothekarbank Lenzburg AG and UBS Group AG.
Swiss National Bank leads in a CBDC trial
According to a publication by Bloomberg, the institutions involved looked into how CBDC transactions can be settled within the Swiss financial network. The report states that the institutions integrated CBDCs in their banking frameworks.
The CBDC trial project was part of an initiative dubbed “Project Helvetica.” The project seeks to look into the details surrounding the issuance of a wholesale CBDC.
The Swiss National Bank noted that currently, no cryptocurrency platform has a systemic framework to support CBDC transactions. The project’s objective was to cover this gap and assess whether a crypto exchange platform could offer this functionality.
“It allows the SNB to deepen its understanding of how the safety of central-bank money could be extended to tokenized asset markets,” said Andrea Maechler, the Governing Board Member of the Swiss National Bank.
While the trial was a success, it failed to address other issues surrounding the use of CBDCs. These issues include cybersecurity and whether CBDCs could be used to process large transactions. The Swiss National Bank also stated that being part of this project did not insinuate that the institution will launch a wholesale CBDC.
Europe pushing for CBDCs
European countries have been actively involved in looking into CBDCs and how these digital assets can be integrated into the existing financial systems. In October 2021, the central bank of France, Banque de France, finalized a 10-month testing project for a CBDC. The project involved Euroclear and some of the leading local banking institutions.
The assessment was to look into whether these institutions would look into how a CBDC can be integrated into France’s debt market. The CBC was used during the trial phase to settle transactions with government bonds.
The Deputy Chief Executive of Euroclear Finance, Isabelle Delorme, noted that the trial was successful. In her statement, Delorme noted that the trial revealed, “central bank digital currencies can settle central bank money safely and securely.”
The Bank of England is also looking towards CBDCs, and it recently partnered with major institutions, including Ripple, to research this product.
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Source: https://insidebitcoins.com/news/swiss-national-bank-partners-with-five-banking-giants-to-test-cbdcs