The Bank for International Settlements and the Swiss National Bank, is exploring the benefits of introducing a central bank digital currency, or CBDC, using blockchain technology.

According to the Dec. 3 announcement, the Swiss BIS Innovation Hub, or BISIH, has completed two proof-of-concept connections that link existing payment systems to a distributed ledger and count encoded assets using CBDC in bulk.

The new initiative is known as Project Helvetia and is a joint venture between BISIH, SNB and Six Group, the best Swiss exchange.

Oslo Bowers said Project Helvetia has studied the technological and legal feasibility of transferring digital assets by releasing CBDC in bulk on Six’s distributed digital asset platform, Six Digital Exchange. A new platform is expected to be launched in the near future which will provide the issuance, trading, settlement, management and sale of token assets.

Financial institutions indicated that the experience should not be interpreted as indicating that the SNB will issue a massive issuance of the central bank’s digital currency.

Andrea Mahler, a board member of the Swiss National Bank, stressed that the SNB will not miss the opportunity to improve the financial system with new technologies:

No matter what technology the financial markets use next, the integrity and reliability of the Swiss financial infrastructure must be preserved. If [distributed ledger technology] could provide significant improvements in securities trading and settlement, the Swiss National Bank would be ready. ”
While Project Helvetia appears to be demonstrating that DLT could be a useful tool in the future for the financial system and CBDCs, there is still no clear agreement on whether the technology is required to launch CBDC. In September 2020, leaders of the SNB and Deutsche Bundesbank appeared to agree that global retail banking projects for central bank digital currencies did not need a blockchain.

Source: CoinTelegraph