The chairman of the Swiss Central Bank, Thomas Jordan, announced the launch of a wholesale Central Bank Digital Currency (CBDC) on Switzerland’s SIX digital exchange as part of a pilot program. According to reports from a conference in Zurich, this initiative is set to begin soon, with the wholesale CBDC operating on the Swiss SIX digital exchange for a limited time.
Despite exploring the potential of CBDCs, the Swiss Central Bank remains cautious about adopting retail CBDCs, expressing concerns about the possible risks they could pose to the financial system. As the use of retail CBDCs is more challenging to monitor, Jordan stated that although one should not rule out their eventual introduction, the current approach remains prudent.
Meanwhile, speaking at the Zero Point Forum, Swiss Central Bank’s governor Andrea Maechler, echoed concerns about CBDCs but noted that the Swiss National Bank (SNB) does not anticipate cash disappearing from the Swiss financial landscape. According to Maechler, cash remains an essential means for retail households to hold central bank money, emphasizing that this feature must persist irrespective of technological advances.
This development comes as at least ten Central Banks are reportedly “crossing the finish line” on launching a CBDC, according to the International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva. Yet, she acknowledged the numerous unresolved aspects regarding the organization and regulation of CBDCs.
In a related move, the IMF recently unveiled plans to develop a global infrastructure for CBDCs. This initiative aims to enable digital currency interoperability and enhance their utilization worldwide. Currently, over 100 central banks globally are exploring the launch of their own CBDCs, with all countries in the G7 economies shifting from the research phase to the development stage, signaling a move towards tangible pilot projects.
As the world gradually embraces the potential of CBDCs, the Swiss Central Bank’s approach reveals a cautious outlook towards integrating retail Central Bank-backed digital currencies into the existing financial systems. While wholesale CBDC experiments may signal a step towards broader adoption, it remains essential to address the potential risks and unresolved issues concerning CBDC regulation and organization.
Source: Cryptonews
