Institutional Blockchains as Sustainable Commons: The Case of SwissLedger

Abstract

The rapid digitalization of finance has exposed a critical gap in the ownership and governance of digital infrastructure. Many essential digital platforms are privately owned, leading to underinvestment and monopolistic control. This paper explores SwissLedger as an innovative public good solution for digital banking infrastructure promoted by the City of Lugano. SwissLedger is a permissioned distributed ledger initiative, where the Proof of Work has been replaced with a Proof of Authority mechanism. We expand upon the SwissLedger concept by situating it in the context of open banking reforms and the evolution of digital infrastructures. We provide an analysis of comparisons between centralized and distributed models, the impact of open banking (in Switzerland and abroad), and an examination of technical, economic, and regulatory challenges. Our methodology involves a design-driven case study of SwissLedger’s development and a comparative policy analysis. Results from initial SwissLedger deployments demonstrate how SwissLedger can serve as a digital commons infrastructure, complementing open banking by providing a shared and secure ledger for financial services and identifying challenges and requirements for broader adoptions. We aim to show that SwissLedger represents a paradigm shift towards collaborative digital infrastructure in finance, mitigating market failures of purely private platforms and setting the stage for a new era of secure and inclusive innovation in banking. Index Terms-digital commons, open banking, distributed ledger, permissioned blockchain, digital market failure, Proof of Authority, public digital infrastructure