The Swiss center will initially focus on two research projects – integration of central bank digital currencies (CBDCs) into a distributed ledger technology infrastructure and analysis of the rising requirements for tracking fast-paced electronic markets by central banks, the annoucement notes.
The Swiss National Bank (SNB) and Bank for International Settlements (BIS) have signed an agreement to cooperate on the BIS Innovation Hub Centre in Switzerland.
Two major projects
According to an official press release on Oct. 8, the BIS’s first three innovation hubs will be established in Switzerland, Hong Kong and Singapore.
The first project will be conducted as part of a collaboration between the SNB and the Switzerland’s major financial service provider SIX Group in the form of a proof-of-concept. The press release says that blockchain-based CBDC would be “aimed at facilitating the settlement of tokenized assets between financial institutions.”
Monitoring tech insights for central banks
Meanwhile, the underlying objectives for the new hub would be identifying and developing insights in critical trends in technology affecting central banks and serving as a focal point for a network of central bank experts on innovation, the press release reads.
Thomas Jordan, Chairman of the Governing Board of the SNB, said that the central bank has been closely following the trend of digitization of the financial sector and technological innovation. He added that the new cooperation will allow the banks involved to further expand expertise in financial markets and their infrastructure.
Attitudes towards CBDCs
In early September, Jordan claimed that stablecoins pegged to foreign currencies could hamper Switzerland’s monetary policy in some circumstances. He argued that providing the general public with access to a CBDC could pose a threat to financial stability by increasing the likelihood of a bank run.
Similarly, BIS’ general manager Agustin Carstens previously expressed a negative stance towards CBDC, claiming that they could facilitate a bank run, enabling people to move their funds from commercial banks to central bank accounts faster, which will destabilize the system.
Swiss Digital Exchange Plans ‘Initial Digital Offering’ in 2020
Swiss Digital Exchange (SDX), a digital asset trading platform by Switzerland’s principal SIX Swiss Exchange, will reportedly launch its initial digital offering (IDO) in 2020.
SDX security token
The not-yet-launched SDX has reportedly set up a global consortium of financial institutions to back its IDO in the middle of 2020, Coindesk reports on Sept. 30.
Thomas Kindler, who took over as SDX CEO on Sept. 1, elaborated that the consortium comprises a group of investors such as banks and market infrastructure providers intending to legitimize the technology and raise capital.
According to the report, the IDO would be similar to a traditional initial public offering, except that the shares will be issued in the form of security tokens on SDX.
Consortium members not revealed
While not specifying the consortium members or the amount expected to raise, Kindler stated that SDX plans to have one large-scale level of investment featuring four or five big investors and another level with 10 smaller potential investors, the report notes.
The firm is reportedly planning to introduce its own SDX security token, shifting from its original plan to first tokenize traditional banking assets to other assets such as real estate. The SDX token will be issued on a blockchain that is based on the enterprise version of R3’s Corda technology.
The news comes a week after SIX postponed the launch of SDX for Q4 2020 after previously projecting to roll out the platform in mid-2019. However, on Sept. 23, SIX launched a prototype of its digital exchange and the central securities depository (CSD), noting that the objective of the prototype is to showcase the future of financial markets to the community as well as to demonstrate the integration of CSD with a central order-book stock exchange model.