Thursday, May 19, 2022

Swiss National Bank is not in favor of issuing a retail CBDC.

The Takeaway:

The Swiss National Bank is not in favor of issuing a central bank digital currency (CBDC) to be used by the general public in day-to-day transactions.

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The Swiss National Bank does not see any overall benefit from issuing a central bank digital currency (CBDC) to be used by the general public and used in day-to-day transactions, governing board member Andrea Maechler said on Tuesday. “We believe the risks outweigh the benefits,” Maechler told a financial conference held in Frankfurt, saying a retail CBDC meant central banks taking on the risks carried by the private sector and increased the risk of bank runs.

 

“Financial inclusion was also not a sufficient argument for CBDCs in Switzerland.”

Financial inclusion was also not a sufficient argument for CBDCs in Switzerland, Maechler said, with almost 100% of the country’s working population having access to bank accounts, while cash was still widely used. “This does not mean the SNB is not interested in CBDC, but our focus is to look at the role that wholesale CBDCs could play,” Maechler said, referring to their use in transactions between financial institutions like banks.

 

SNB used digital currency to settle transactions involving five commercial banks.

Switzerland’s central bank revealed last week that it had successfully used digital currency to settle transactions involving five commercial banks. That was the latest trial of the technology in wholesale markets. The trial, called Project Helvetia, is expected to bring the introduction of central bank digital currencies a step nearer in Switzerland, which has conducted some of the most advanced central bank digital currency (CBDC) experiments in Europe. Central banks worldwide have stepped up work on CBDCs to make existing payment systems more efficient and counter the challenge from cryptocurrencies, with research focusing on versions for both wholesale and retail use. 

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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