The Swiss National Bank (SNB) announced that it will be launching a pilot program for a wholesale central bank digital currency (CBDC) on the SIX digital exchange. The chairman of the bank, Thomas Jordan, revealed this news during the Point Zero Forum in Zurich on Monday.
This project goes beyond a simple experiment, as it involves the creation of actual money that is equivalent to bank reserves. The goal is to test these funds in real transactions with market participants.
While this project has a specific time frame, it is a significant step into the digital currency space for the SNB.
Central banks around the world are exploring digital versions of their currencies to prevent the complete reliance on the private sector for digital payments, especially as the use of cash continues to decline, a trend that has been accelerated by the COVID-19 pandemic.
However, despite this move towards digital currencies, the SNB remains cautious about the use of public or retail CBDCs. Instead, they are focusing on wholesale CBDCs, which use tokenized securities. Thomas Jordan expressed concerns about the potential risks associated with retail CBDCs and the difficulty of controlling their usage.
While the SNB considers the adoption of digital currencies, they do not envision a complete elimination of cash in Switzerland, as stated by Andrea Maechler, the governor of the central bank.
Compiled by Coinbold