- The Swiss National Bank (SNB) is exploring three options for DLT settlement, including its pilot wholesale CBDC, tokenized private money, and connectivity between traditional payment systems and DLT networks.
- SNB has pioneered a wholesale CBDC pilot that settles tokenized securities transactions on the SIX Digital Exchange, though no permanent implementation has been committed to yet.
- Three Swiss banks—PostFinance, Sygnum, and UBS—are separately developing a tokenized deposit infrastructure for commercial bank money payments.
The Swiss National Bank (SNB) has outlined its ongoing digital currency initiatives in its annual report, revealing exploration of what’s often called a “synthetic CBDC” – privately issued digital currency backed by central bank reserves. This development comes as Switzerland maintains its position at the forefront of central bank digital currency innovation.
The SNB has been operating a pioneering wholesale central bank digital currency (wCBDC) pilot that facilitates settlement of tokenized securities on the SIX Digital Exchange (SDX). This initiative represents one of three approaches the Swiss central bank is investigating for distributed ledger technology (DLT) settlement solutions.
The synthetic CBDC concept bears similarities to the UK’s Fnality system, where UBS was a founding member. Fnality’s institutional settlement infrastructure allows banks to transfer money from central bank accounts to be tokenized by Fnality UK. This creates a shared token that enables instant settlement while maintaining exact value parity with the pound sterling – similar to a stablecoin but with institutional-grade security and restrictions.
Beyond the wCBDC and synthetic options, the Swiss National Bank is also examining connectivity between its SIC payment system and DLT systems, previously tested during its Project Helvetia CBDC exploration. The central bank emphasized it hasn’t committed to a permanent wCBDC implementation, nor expressed preference among the three options under consideration.
In a parallel development, three major Swiss financial institutions – PostFinance, Sygnum, and UBS – in cooperation with the Swiss Banking Association, are working on a separate tokenized deposit infrastructure. This initiative aims to enable tokenized commercial bank money for payment purposes. Unlike the SNB’s tokenized private money exploration, this project doesn’t involve a joint token, according to previous announcements.
The proliferation of tokenized money projects in Switzerland reflects the country’s continued leadership in exploring digital currency innovations for institutional and wholesale financial markets.
Ledger Insights Research has published a comprehensive report covering bank-issued stablecoins and tokenized deposits, featuring more than 70 projects. Find out more here.
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