The Swiss Central Bank, under the leadership of Chairman Thomas Jordan, has recently made an announcement concerning the launch of a wholesale central bank digital currency (CBDC) pilot. This pilot program will be conducted on Switzerland’s SIX digital exchange and is set to commence in the near future, as reported by Reuters. Chairman Jordan revealed that the wholesale CBDC pilot will have a limited duration on the Swiss SIX digital exchange.
In the past, the Swiss Central Bank has maintained a cautious approach towards the concept of a retail central bank-backed digital currency. Chairman Jordan expressed concerns about the potential risks associated with retail CBDCs and their impact on the financial system. He stated that the implementation and control of retail CBDCs posed greater challenges. While he did not rule out the possibility of introducing retail CBDCs in the future, he emphasized the bank’s current prudence in this regard.
Swiss Central Bank’s Stance on Cash and CBDCs
During a panel discussion at the Zero Point Forum, the governor of the Swiss Central Bank, Andrea Maechler, elaborated on the bank’s perspective on CBDCs. Maechler highlighted that despite the exploration of CBDCs, the Swiss National Bank (SNB) does not anticipate the disappearance of cash in Switzerland. She emphasized the importance of cash as a means for retail households to possess central bank money, adding that this fundamental feature should remain intact regardless of technological advancements.
According to recent statements from the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, numerous central banks worldwide are making substantial progress in issuing their own CBDCs. However, Georgieva noted that there are still critical decisions to be made regarding the organization and regulation of CBDCs. To address this, the IMF is actively working on developing a global infrastructure that would enable interoperability among different CBDCs and enhance their overall utilization.
Currently, more than 100 central banks across the globe are exploring the potential of implementing their own CBDCs. In the G7 economies, all countries have transitioned from the research phase to the development stage, indicating a clear shift towards tangible pilot projects.
The Swiss Central Bank has initiated a wholesale CBDC pilot on Switzerland’s SIX digital exchange. While the bank remains cautious about retail CBDCs, it recognizes the importance of retaining cash as a means for retail households to hold central bank money. The progress made by central banks in issuing CBDCs highlights the global trend towards digital currencies, although significant decisions regarding organization and regulation are still pending.