The trading, clearing and settlement of assets are in flux. Driven by technological innovation and new requirements in terms of security, speed and efficiency, financial market infrastructures (FMIs) are evolving. At the same time, a new generation of FMIs is emerging, based on distributed ledger technology (DLT). Should such infrastructures become systemically important, international regulatory standards recommend that transactions performed on them be settled in central bank money, wherever possible and practicable.

In Project Helvetia, the Swiss National Bank is exploring two approaches to settling transactions with tokenised assets in central bank money. The main differences between these two approaches are where the cash-side settlement occurs and what form the central bank money takes.

The first approach takes the form of a wholesale central bank digital currency (wholesale CBDC), a digital Swiss franc issued by the SNB which is reserved for financial institutions. The central bank money and the assets alike exist in tokenised form on the same DLT infrastructure, allowing them to be transferred simultaneously on a delivery-versus-payment basis. This therefore constitutes an integrated approach. In the context of the Helvetia pilot, the SNB is issuing wholesale CBDC on the DLT-based settlement platform of SIX Digital Exchange (SDX).

The second approach involves the settlement of tokenised assets in traditional central bank money. This is made possible by means of a link between the DLT settlement platform and the real-time gross settlement (RTGS) system of the Swiss Interbank Clearing (SIC) payment system. The link coordinates the settlement of money and tokenised assets between the two platforms, which is why it constitutes a synchronised approach. The financial market infrastructure BX Digital (BXD) uses such an RTGS link to the SIC system in a production environment.

Project Helvetia, which will run until at least June 2027, is aimed at helping understand various use cases for the settlement of tokenised assets with a view to how the SNB can best continue to fulfil its mandate in the future. At the same time, the SNB is supporting private sector innovation.

As part of the Helvetia pilot, the SNB is providing central bank digital currency for financial institutions (wholesale CBDC) on the SIX Digital Exchange (SDX) settlement platform. This platform is a regulated financial market infrastructure (FMI) based on distributed ledger technology. Financial institutions can use it to settle transactions involving tokenised assets directly with wholesale CBDC.

The Helvetia pilot will continue until at least June 2027. An extension is possible and would be communicated in a timely manner to facilitate planning.

As the pilot proceeds, its scope is to be gradually expanded. Additional financial institutions will be able to join, while wholesale CBDC will also be made available for a broader range of financial market transactions.

With the project, the SNB is supporting private sector innovation. The pilot does not, however, constitute a commitment on the SNB's part to introduce wholesale CBDC on a permanent basis. Any such decision is at the sole discretion of the SNB.

To qualify for participation in the Helvetia pilot, financial institutions must have a sight deposit account with the SNB and be admitted to the Swiss Interbank Clearing (SIC) payment system (cf. Instruction sheet on admission to the SIC system and sight deposit accounts). They must also be SDX members.

The SNB sets out the conditions for participating in the pilot, and for the availability and use of wholesale CBDC in that context, in a binding document that must be signed by the admitted financial institutions.

With the RTGS link, the SNB is exploring the synchronised settlement of tokenised assets. The financial market infrastructure BX Digital (BXD) uses this RTGS link. It operates a 'small DLT trading system' licensed by FINMA. BXD's offering comprises multilateral trading in DLT assets as well as downstream settlement. It is aimed at supervised financial institutions. DLT assets are settled via the public Ethereum blockchain. The cash-side settlement of traded assets occurs on the SIC system. Since the SIC system is a real-time gross settlement system, this type of settlement is also referred to as an RTGS link.

As part of Project Helvetia, the SNB is exploring at the conceptual level the possibilities, limitations and potential improvements of the RTGS link for settling tokenised assets.