A picture taken on September 25, 2019 in Bern shows the building of the Swiss National Bank (SNB), the central bank of Switzerland. FABRICE COFFRINI | AFP | Getty Images

Switzerland's central bank is working with the country's stock exchange to examine the possible use of digital currencies in trading. In a statement on Tuesday, Swiss stock exchange operator SIX Group said it was partnering with the Swiss National Bank (SNB) on a proof of concept to "explore how digital central bank money could be used in the settlement of tokenized assets between market participants." Such a framework could involve connecting the Swiss mechanism for clearing payments with SIX's proposed digital exchange, or the issuance of an electronic version of the Swiss franc from the SNB. The research will be carried out at a hub set up by the SNB in partnership with the Bank for International Settlements, an umbrella group for the world's largest central banks.

'Tokenization'

SIX has been working on a digital exchange that would use blockchain, the underlying technology behind cryptocurrencies like bitcoin, to issue and settle trades in digital assets. A big focus of the group is the "tokenization" of traditional assets like shares and bonds — essentially creating digital versions of such securities — a move the firm claims would reduce the time it takes to complete a trade, from a number of days down to less than a second.