Benzinga - In a recent announcement at the Point Zero Conference in Zurich, Thomas Jordan, the President of the Swiss National Bank (SNB), disclosed plans for the launch of a self-backed CBDC. The SNB intends to conduct a pilot project by listing this digital currency on the digital market of the Zurich Stock Exchange. The primary objective: to test the viability of conducting real transactions using the digital currency within the market.
While emphasizing that the project would be “experimental,” Jordan emphasized that the cybercurrency’s value would be real and supported by the reserves of the SNB. However, he also stated that the project would have a limited duration. Discussions at the conference, which are scheduled from today until June 28, are hosting influential financial officials, including Swiss Finance Minister Karin Keller-Sutter, accompanied by Singapore’s Deputy Prime Minister Heng Swee Keat.
In response to the decline of cash usage, which has been accelerated in some cases by the COVID-19 pandemic, central banks worldwide have been exploring digital versions of their currencies. These efforts aim to prevent digital payments from being solely controlled by the private sector.
Unlike wholesale Central Bank Digital Currencies (CBDCs), which utilize tokenized securities, the SNB has been cautious about the implementation of public, or retail, CBDC. Jordan expressed concern regarding the potential risks that retail CBDCs could pose to the financial system, citing difficulties in their control.
Despite the SNB’s exploration of digital currencies, the central bank’s governor, Andrea Maechler, asserted during a separate panel at the Zero Point Forum that cash is unlikely to disappear in Switzerland. The SNB remains cognizant of the continued importance of cash in the country’s financial landscape.
The launch of a self-backed digital currency by the SNB marks a significant step in their exploration of digital payment systems. Through this pilot project, the SNB aims to assess the practicality and potential impact of a digital currency in real-world transactions. While they approach retail CBDC with caution due to their associated risks, the SNB recognizes the need for continued adaptation in response to changing payment preferences and technological advancements.
The SNB is the central bank of Switzerland, established in 1907. It plays a crucial role in maintaining price stability, promoting monetary and financial stability, and conducting monetary policy in the country.
It is responsible for conducting monetary policy, issuing Swiss franc banknotes, promoting financial stability, and managing foreign exchange reserves. The bank continues to adapt to evolving economic challenges and technological advancements to fulfill its mandate and maintain Switzerland’s economic well-being.
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