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Evolution ofthe use of
digital bonds in Switzerland
The canton of Zurich in Switzerland issued a digital bond offer worth
CHF 100 million (US $113 million)
on the SIX Digital Exchange (SDX)
a historic development
aimed at promoting digitization in the country.
Digital bonds will be used to beat settlements in the territory of
Zurich using the Central Bank's wholesale digital currency (CBDC)
within the symbolic assets programme of the Swiss National Bank.
Payment is expected to take place on December 1
and will only be available to two commercial banks.
UBS
Raiffeisen Switzerland
and Zurcher Kantonalbank share as lead managers in this release,
Based on their experience in
the previous experimental cryptocurrencies of central banks.
This version, which runs for 11 years and carries a 1.45% voucher
is expected to pave the way for other regions of Switzerland to explore tokens.
Zurich bonds will be listed on the SDX
and SIX Swiss exchanges, combining traditional financing
with Web3 technology for investors.
The company
spokesperson stated that
investors will be able to achieve faster reconciliation time
and improve liquidity by subscribing to the innovative SDX platform.
SDX is a success in developing digital bonds
obtaining operating licenses from FINMA
the regulator of Swiss markets, in 2021.
Thomas Depp said:
The first
coded bonds were issued on the SIX Digital Exchange
and were placed on the market
This confirms the effectiveness of distributed ledger technology (DLT)
in the regulated capital market. This flagship release on
the Global SIX Exchange is the beginning of a new era.
Regarding
the wholesale cryptocurrency usage settlements of central banks
the latest Swiss National Bank beta allows for the full testing of
central banks' wholesale cryptocurrencies.
This experience features the issuance of
the Central Bank's digital currency (CBDC) on the SDX platform
It is a realistic platform designed to
test display flexibility in realistic conditions.
In February
bonds worth 100 million Chino rupees (US $113 million)
were released in the city of Lugano and enjoy specifications similar to
those of the canton of Zurich.
However
SIS CSD is used in
the Lugano display to achieve higher levels of liquidity,
This allows investors not to need practical knowledge of
blockchain technology
the first digital bond selected
for the Swiss National Bank's buyback agreement.
Digital bonds receive great attention
Financial entities and regulators have noted interest in the concept of
digital bonds and token, and both sides have strived to
strike an appropriate balance.
Proponents of
digital bonds point to several advantages that make them attractive
such as increased transparency, accelerated reconciliations
and cost savings. At the same time
the authorities are endeavouring to
develop legislative frameworks to protect investors.
For example, the Philippine bank UnionBank
(UBP) issued its digital bonds
The United Arab Emirates (UAE)
is preparing to
launch its shows in collaboration with HSBC and ADX for listing.
These examples reflect the growing trend towards reliance on
digital technology in the financial sector and the growing interest in
digital bonds as an innovative financing tool.
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