Swiss central bank accepts digital native bond as repo collateral

Move follows dual listing of City of Lugano bond on SDX and SIX Swiss Exchange.

By Richard Schwartz

A digital bond issued by the city of Lugano in January has become the first digital native asset accepted as eligible collateral for Swiss National Bank (SNB) repos.

“We are very pleased that the SNB has included the Lugano digital bond in the SNB General Collateral Basket,” commented Alexandre Kech, head, digital securities at SIX Digital Exchange (SDX). “I see this as an important signal to market participants that digital bonds have not only arrived in the domestic CHF bond market but have established themselves as an integral part of the capital market value chain in Switzerland,”.

The six-year CHF senior unsecured bond with a total issue volume of CHF 100 million and a maturity in 2029 was issued on SDX with Zürcher Kantonalbank (ZKB) as sole lead manager. It is listed on both SDX Trading AG and SIX Swiss Exchange and can be held in both the CSDs of SDX and of SIX (SIX SIS).