The Swiss National Bank (SNB) has announced its plans to launch a pilot project for a wholesale central bank digital currency (CBDC) on Switzerland’s SIX digital exchange.
The SNB aims to test real transactions with market participants by treating the CBDC as real money equivalent to bank reserves. The upcoming pilot project will commence soon and has a limited duration.
SNB’s Cautious Approach to CBDC While Exploring Digital Currencies, Remains Prudent about Retail CBDCs
The SNB has taken a cautious stance on the use of public, or retail, CBDCs. Chairman Thomas Jordan expressed concerns about potential risks posed to the financial system by retail CBDCs.
The difficulties are associated with controlling their usage. He emphasized that the SNB does not exclude the possibility of introducing retail CBDCs in the future. But for now, they exercise prudence.
Importance of Preserving Cash in Switzerland
SNB affirms continuation of cash as a means to hold central bank money. In a separate panel discussion at the Zero Point Forum, the central bank’s governor Andrea Maechler, underscored the significance of preserving cash in Switzerland.
Further, she emphasized that cash serves as the primary method for retail households to hold central bank money. The SNB recognizes the enduring value and necessity of cash alongside the exploration of digital currencies.
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