Zurich, Jan. 13 (Xinhua) – The Swiss central bank has successfully used digital currency to settle transactions involving five commercial banks, the Swiss National Bank said Thursday in its latest test of the technology in wholesale markets.
The test, called Project Helvetia, could be one step closer to the introduction of central bank digital currencies in Switzerland, which has conducted the most advanced central bank digital currency (CBDC) experiments in Europe.
Central banks around the world have stepped up work on the CBDC, partly to make existing payment systems more efficient and to combat the cryptocurrency problem, with research focused on versions for wholesale or retail use.
Under Helvetia, known as the Swiss symbol, the SNB combined CBDCs into payment systems and used them in transactions simulated in an experiment involving UBS, Credit Suisse Goldman Sachs Citigroup and Hypothekarbank Lenzburg.
The scheme showed that payments ranging from 100,000 to 5 million Swiss francs ($ 109,469 to $ 5.47 million) could be made instantly, and this eliminated the risk of conflict.
“We have shown that innovation can be used to maintain the best elements of the current financial system, including settlements in central bank money, while opening up new incentives,” said Benoit Coeure, International Bank for Reconstruction and Development (BIS). ‘limi leader. Hub, who also participated in the experiment.
The project, which will run for three days until the end of 2021, also involved Swiss stock exchange operator SIX, a major provider of financial infrastructure services in Switzerland.
It included the issuance and purchase of wholesale CBDCs, as well as payments from them and settlements on the purchase of securities in Switzerland, as well as their use for cross-border transactions.
This follows previous experiences by SNB, BIS and SIX on the use of digital currencies here.
Central banks around the world have stepped up work on the CBDC to make existing payment systems more efficient, with research focused on wholesale and retail versions.
While retail CBDCs are used by households and businesses for day-to-day operations, wholesale versions can be used to make large payments between banks or other organizations with central bank accounts.
Proponents argue that wholesale CBDCs can also make settlement transactions on securities more efficient – it can take days, with multiple parties involved.
The CBDC can be programmed with security delivery instructions immediately upon receipt of digital cash.
While the central banks of Hong Kong, Thailand and the United Arab Emirates, as well as Singapore, have considered the use of the CBDC for wholesale cross-border payments, several have looked in detail at how the CBDC will integrate with commercial lenders.
The Helvetia team will now evaluate the results before deciding on the next steps. ($ 1 = 0.9135 Swiss francs) (John Reville’s interview in Zurich and Tom Wilson’s interview in London, edited by Matthew Lewis)