The Swiss National Bank moves forward with its digital franc pilot, extending it by at least two more years.
The Swiss National Bank (SNB) has decided to extend its pilot program for issuing a wholesale central bank digital currency (CBDC) until at least 2026, Bloomberg reports, citing SNB governing board member Antoine Martin.
Initially scheduled to conclude on Jun. 30, the pilot is now expected to include more financial institutions over time, Martin said, adding that wholesale CBDC “can be made available for a wider range of financial transactions.” Thus far, the pilot involves six commercial banks, including UBS Group AG and Commerzbank AG, working in collaboration with Swiss stock exchange provider SIX.
“The future success of the pilot project will largely depend on whether new financial market participants join, whether the volume of transactions increases, and whether additional financial market transactions are settled on this platform.”
Antoine Martin
Martin noted though that the decision to extend the pilot doesn’t “constitute a commitment on the part of the SNB to introduce wholesale CBDC or digital SNB Bills on a permanent basis.”
During the trial, the SNB issued money on a blockchain, allowing financial institutions to use the tokenized asset for transactions with the central bank. Unlike retail-focused CBDC pilots, such as those seen in China, the digital franc is limited to institutional transactions only.
Bloomberg noted that the digital franc has already demonstrated practical applications, settling at least five bond issuances on SIX’s digital exchange in Zurich, including a significant $226 million settlement for a World Bank bond earlier this month.