Switzerland Central Bank and SIX Digital Exchange Eye Digital Currencies for Trade Settlements
Swiss National Bank (SNB), Switzerland’s central bank, together with Bank for International Settlements (BIS) are jointly exploring on how a central bank digital currency (CBDC) can be used to trade tokenized assets, the Block reports. Bank for International Settlements (BIS) acts as the central bank for other central banks in the world.
In a press statement, the SNB stated that it had already inked an operational contract with BIS and the two will launch a hub in Switzerland whose main mandate is to explore the possibility of a central bank issued digital currency in the country.
According to the press statement, the new type of central bank currency will aim at aiding the settlement of tokenized assets among various financial institutions. At the moment, the project is creating a proof of concept together with SIX Digital Exchange (SDX) which is a subsidiary of SIX stock exchange.
In a separate press statement released by SIX, the new project by SDX will seek to come up with a platform that will explore the technical options of digitizing the Swiss franc on the SDX blockchain platform. The project will also look at the possibilities of linking the Swiss Interbank Clearing System on the SDX platform.
SDX explained that distributed ledger-based tokenized assets, as well as a central bank issued digital money, will reduce counterparty risk and free financial innovations.
The head securities and exchanges at SIX, Thomas Zeeb, explained that their proof of concept about a central bank-issued digital currency for use by various participants on DLT platforms will open up technological advancement and encourage different market participants to explore the DLT technology as well as digital assets.
In the recent past SIX has been a crucial player in financial innovation and has listed various crypto-based exchange-traded assets. Just last week, a fintech-based company Amun AG stated that it had successfully listed a Bitcoin and Ether ETP that will be denominated through the Swiss franc on SIX exchange. In addition, Six is set to launch its own digital assets exchange after the release of a prototype platform in September this year.