The Swiss National Bank (SNB) has announced the commencement of a pilot initiative with Central Bank Digital Currency (CBDC), known as Helvetia Phase III. Running from December 2023 to June 2024, the pilot involves six financial institutions: Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank. This marks the first implementation of wholesale CBDC and utilizes the delivery-versus-payment mechanism for tokenized bonds, supported by a distributed ledger technology (DLT) financial infrastructure.

The transition from testing to production phase signifies that CBDC will now be utilized for settling actual bond transactions, with participating banks acting as intermediaries between investors and issuers. These institutions will tokenize assets using the SIC infrastructure and integrate with traditional bond settlement systems through SIX SIS. Additionally, the testing of trading and settlement of repo transactions will be conducted using the SIX Repo and SDX test systems.

DLT and tokenized assets have been previously introduced to enhance transparency and efficiency in regulated financial systems. While the success of the pilot project remains uncertain, the SNB assures that Central Bank money will continue to play a vital role in maintaining financial system efficiency and stability.

The Helvetia Phase III pilot project aims to assess various models for settling tokenized assets, with the current initiative focusing on issuing wholesale CBDC for selling tokenized assets. This development follows SNB's evaluation of three distinct models for settling tokenized asset transactions, with the upcoming pilot employing the first model.

Thomas Jordan, chairman of the SNB’s Governing Board, highlighted the significance of enabling secure and efficient transaction settlements via wholesale CBDC on a regulated and productive DLT platform for the first time.