CBDCs: Swiss National Bank (SNB) to Introduce Virtual Currency Pilot Program

The Swiss National Bank (SNB) will reportedly be issuing a wholesale central bank digital currency (CBDC) on Switzerland’s SIX digital exchange as part of a pilot program, the central bank’s chairperson revealed at a recent conference that took place in Zurich on Monday (June 26, 2023).

As reported by Reuters, Chair Thomas Jordan stated during the Point Zero Forum:

“This is not just an experiment, it will be real money equivalent to bank reserves and the objective is to test real transactions with market participants.”

Jordan also mentioned that the pilot initiative, which should begin soon, was meant at the moment to be for a limited period of time.

Reserve banks across the globe are now studying digital representations of their respective national currencies in order to avoid leaving virtual payments to the private industry, as the gradual decline of cash transactions has picked up in certain cases following the COVID-19 outbreak.

In contrast to wholesale CBDCs which reportedly make use of tokenized securities, the SNB has been careful regarding the use of public (or retail) CBDCs.

Jordan added that he would have concerns regarding possible risks that retail CBDCs might have for the financial sector, meanwhile, the use of them was more challenging to try to curb.

He added:

“We do not exclude that we will never introduce retail [CBDCs] but nevertheless we are a little bit prudent at the moment.”

Despite exploring virtual currencies, the SNB doesn’t think cash will be completely phased out in Switzerland, the reserve bank’s governor Andrea Maechler stated while sharing insights during another panel at the Zero Point Forum.

She continued:

“It is the one way that retail households can hold central bank money. That feature needs to be maintained irrespective of the technology.”


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