The digital franc pilot program of the Swiss National Bank is extended for a minimum of two additional years.
According to Bloomberg, which quotes SNB governing board member Antoine Martin, the Swiss National Bank (SNB) has chosen to prolong its pilot program for producing a wholesale central bank digital currency (CBDC) until at least 2026.
According to Martin, the pilot program, which was initially set to end on June 30, is now anticipated to involve additional financial institutions over time.
He also mentioned 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. Antoine Martin:
“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.”
However, Martin pointed out that the decision to prolong the pilot program does not “constitute a commitment on the part of the SNB to introduce digital SNB Bills or wholesale CBDC on a permanent basis.”
Financial institutions could utilize the tokenized asset for transactions with the central bank during the trial since the SNB issued money on a blockchain.
The digital franc can only be used for institutional transactions, unlike retail-focused CBDC trials like those in China. According to Bloomberg, the digital franc has already shown usefulness by resolving at least five bond issuances on SIX’s digital exchange in Zurich, including a big $226 million settlement for a World Bank bond earlier this month.
