Swiss National Bank’s Jordan against issuing retail cenbank digital currency -April 08, 2024 at 12:04 pm EDT

ZURICH, April 8 (Reuters) – The Swiss National Bank sees
no need for a central bank digital currency (CBDC) to be issued
to the general public, Chairman Thomas Jordan said on Monday.

“Consumers and businesses already have access to a wide
range of efficient and innovative payment instruments offered by
the private sector,” Jordan told an event in Zurich, in remarks
that addressed a product known as a retail CBDC.

“Retail CBDC could fundamentally alter the current monetary
system and the role of central banks and commercial banks, with
far-reaching consequences for the financial system,” he said,
with the risks outweighing any potential benefits.

Still, the SNB has been trialling a scheme using wholesale
CBDC – which enables payments using central bank money between
commercial banks – to speed up and make payments cheaper.

The central bank

last year

launched a pilot project using CBDC for financial
institutions, with UBS and Zuercher Kantonal Bank among
those participating.

Four bond issuances, from the cantons of Basel-Stadt and
Zurich and the cities of Lugano and St Gallen, were successfully
settled with wholesale CBDC as part of the pilot.

The trial, called Project Helvetia III, showed there
were benefits from using central bank money to settle
transactions, Jordan said.

“Swiss franc wholesale CBDC can be issued on a
third-party platform and used to settle tokenised assets safely
and efficiently,” he said.

Still, questions remained before a decision could be
made on whether a wholesale CBDC should be introduced generally
in Switzerland, Jordan said.

Issues to be resolved included whether Swiss franc
digital central bank money could be held overnight, how it would
be remunerated, and which financial institutions should have
access.

The SNB is also looking into how operations such as
repos or SNB Bills could be settled using Swiss franc wholesale
CBDC, Jordan said.
(Reporting by John Revill
Editing by Dave Graham)