Swiss Banks Issue First wCBDC-backed Digital Bonds as UK Government Favors More CBDC Tests

By: Isha Das

The Cantons of Basel-City and Zurich, two Swiss banks, have taken a significant step forward in financial operations by successfully issuing the first-ever digital bonds on the SIX Digital Exchange (SDX) using real wholesale CHF (Swiss Francs) Central Bank Digital Currency (wCBDC). These digital bonds have been issued as part of the Swiss National Bank's (SNB) 'Project Helvetia Phase III', with the Basler Kantonalbank and Zürcher Kantonalbank acting as the issuer agents. These developments highlight the potential of Distributed Ledger Technology (DLT) over blockchain in providing efficiency gains and increased transparency in global financial transactions.

Meanwhile in the UK, the House of Commons has called on the Bank of England and the Treasury to conduct further consultative work to evaluate the benefits of launching a digital pound. The U.K. Parliamentary Committee expressed concerns over high costs and unclear benefits of the launch, warning against further investment before proper viability and risk assessment. The tests of an English CBDC have showed considerable potential in terms of issuance, distribution and privacy.

These developments appear to be setting new standards in DLT-based financial markets infrastructure and could potentially revolutionize the global financial sector in future.