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Bank for International Settlements (BIS) along with Swiss National Bank (SNB) recently announced that the experiment with Central Bank Digital Currency (CBDC) ended successfully. Helvetia project proved the effectiveness of tools designed to regulate digital assets.

Helvetia project completed

Central Bank Digital Currency commissioned the verification TO, namely the Swiss Innovation Hub of the BIS at the end of October this year. Its implementation was undertaken by SNB.In addition, the project also involved the financial infrastructure operator SIX, which can boast extensive experience in the sector blockchain and digital assets.

According to the plan, the entire experiment was to end this year, which was also successfully accomplished. Helvetia project demonstrated the effectiveness of two Proof by Concept (PoC), constituting a regulatory tool for digital assets in a distributed ledger, through the use of funds from the central bank. The project included two tests in total. The first was about connecting the current payment system to the distributed ledger, and the second was about CBDC issue.

CBDC testing

Central Bank Digital Currency is not dedicated to end consumers, but to financial institutions and sector operators. Therefore, the entire undertaking consisted solely of technical and legal tests focused on CBDC, applicable in the money exchange on a large scale. They included the wholesale release of CBDC on a distributed digital asset platform, and then connecting the platform to the currently operating payment system. Thanks to this, the feasibility and compliance with the legal regulations of the tested alternatives in a technical configuration similar to the one that could be used in practice was demonstrated.

Further projects are possible

The conducted experiment was successful because integration was achieved tokenized digital assets and money that has been issued by a central bank. There are plans for further joint projects of entities that were involved in the experiment. It has been shown that CBDC may bring benefits in the use of digital resources, but the creation of related political and administrative barriers cannot be ruled out. A solution to avoid them could be to integrate the DLT platform with already functioning systems, but this would destroy many positive aspects related to the use of CBDC. Therefore, it is necessary to take further actions to take a broader look at the specificity of Central Bank Digital Currency, targeting at the same time solutions that ensure a compromise between risk and benefits. Overall, however, it can be concluded that the Helvetia project significantly contributed to a better understanding of digital innovations and their importance for the development of the financial system.

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