SIX Digital Exchange publishes first report on settling tokenized assets in central bank money

Tim Grant — 28 January 2021
SIX Digital Exchange, the Swiss National Bank, and the Bank for International Settlements’ Innovation Hub (BISIH) Swiss Centre, and have published the Helvetia report, a two proofs-of-concepts experiment using “near-live” systems to settle digital assets on a distributed ledger with central bank money.

The initiative demonstrated the feasibility and legal robustness of issuing a wholesale CBDC onto a distributed digital asset platform and linking the digital asset platform to the existing wholesale payment system. The collaboration sets the stage for further joint experimentation and policy work to assess the impact of digital innovation on the future of the financial system.

Project Helvetia – Phase I completed

The project was carried out in the test environments of the traditional Swiss RTGS Swiss Interbank Clearing (SIC) system, and the near-live SDX platform. Two options to settle tokenised assets in central bank money were investigated: in a first proof of concept (PoC), the SNB issued Swiss franc wholesale CBDC (w-CBDC) on the SDX platform for the settlement of tokenised assets; in a second PoC, the SDX platform was linked to SIC, to allow for the settlement of tokenised assets against payments in SIC balances with the central bank. The experiments confirmed both PoCs as realistically possible. The functional feasibility of both PoCs was successfully shown in the production-grade operational test environments. Also, it was demonstrated that the transfer of w-CBDC and tokenised assets can be designed in a way to allow settlement on a legally robust basis.

Continuation of Project Helvetia – Phase II

The successful collaboration led to deep insights and to a commitment to continue the project. The next step is to seek a deeper understanding of the practical complexities and policy implications of issuing w-CBDC. This project is a tangible example of the value of cooperation as change gathers pace across the globe. Private system operators such as SIX Digital Exchange and central banks alike have an incentive to preserve the use of safe money.

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