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Swiss central bank, BIS working on a digital currency

Yogita Khatri

Switzerland’s central bank, the Swiss National Bank (SNB), and the Bank for International Settlements (BIS), considered to be the central bank for central banks, are together exploring a blockchain-based digital currency.

The SNB announced the news Tuesday, saying that it has signed an operational agreement with the BIS to open a hub center in Switzerland, which will carry out research on the digital currency project.

“This new form of digital central bank money would be aimed at facilitating the settlement of tokenized assets between financial institutions,” said the SNB. Currently, the project is developing a proof of concept in partnership with Swiss stock exchange SIX Group’s digital exchange, the SIX Digital Exchange (SDX).

SIX said in a separate statement on Tuesday that the SDX will provide its platform to explore technical possibilities for integrating digital central bank currency into blockchain platforms. For instance, connecting the existing Swiss Interbank Clearing System or issuing digital Swiss franc tokens by the SNB for financial market participants (wholesale central bank digital currency) on the SDX system, SIX said.

“Our proof of concept on the subject of digital central bank money for financial market participants on DLT [distributed ledger technology] platforms will not only provide technological insights, but will also send an important signal to all market participants to take steps to explore DLT technology and digital assets,” said Thomas Zeeb, head securities and exchanges at SIX.