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The Canton of Zurich and the City of Basel recently completed tokenized bond issuances using wholesale Swiss Franc and wholesale central bank digital currency (wholesale CBDC) for settlement. These transactions were part of the Helvetia III pilot, a wholesale CBDC project involving the Swiss National Bank and the SIX Digital Exchange (SDX).
Basel’s bond was issued through the Basler Kantonalbank, while the infrastructure used for tokenizing Swiss Francs backed by a central bank balance was provided by SDX. The successful settlement of these securities transactions in a developed economy on regulated blockchain-based infrastructure marks a significant milestone for the adoption of tokenized, DLT-based financial markets infrastructure.
Investors can hold both bonds at the central securities depository of SDX or the main SIX SIS, and traders have the option to purchase either bond on SDX or the main SIX Swiss Exchange.
SDX is utilizing R3’s Corda enterprise blockchain for the tokenization of assets. This move is expected to bring various benefits to institutions operating in regulated financial markets, including access to new sources of liquidity, improved capital efficiency, and enhanced transparency and risk management.
The recent bond issuances are part of a series of live trials under the Helvetia Phase III project, which aims to further develop wholesale CBDC and digital assets for use in a live production environment.