SNB’s Thomas Jordan announced plans for a wholesale central bank digital currency (wCBDC) at a Zurich conference.
The Swiss National Bank initiated the wCBDC initiative last year.

The head of the Swiss National Bank (SNB), Thomas Jordan, revealed during a recent conference in Zurich that the SNB plans to develop a digital currency called a wholesale central bank digital currency (wCBDC), as reported by Reuters.

Swiss National Bank Introduces Wholesale Central Bank Digital Currency (wCBDC)

As part of a pilot program, the wholesale Central Bank Digital Currency (wCBDC) will be launched on Switzerland’s third-largest stock exchange, the SIX digital exchange. While the Swiss National Bank (SNB) has not specified a precise date, the chairman of the SNB indicated that the release of the CBDC would occur in the near future. SIX Digital Exchange is a subsidiary of the SIX Group, which oversees Switzerland’s official stock exchange.

Additionally, this aligns with previous statements made by the Bank for International Settlements (BIS), which collaborates closely with the SNB. The BIS had planned to develop a functional prototype by mid-2023 as part of Switzerland’s research on cryptocurrencies under the codename “Project Tourbillon.” The primary objective is to assess the real-world performance of the wCBDC during transactions with market participants.

According to the SNB Chairman,

This is not just an experiment. It will be real money equivalent to bank reserves, and the objective is to test real transactions with market participants.

The decision made by the SNB is in line with the growing trend observed among central banks to explore and develop digital currencies. These digital assets are becoming increasingly popular due to their potential to streamline financial processes and improve cross-border payments.

Switzerland, renowned for its financial innovation, aims to capitalize on this technology to enhance its financial economy. The SNB regards this initiative as a preliminary trial to determine the viability of a broader implementation of eCHF, the chairman of the SNB confirmed that the CBDC will hold the status of “real money” backed by the institution.

The Swiss National Bank initiated the wCBDC initiative last year. In January, the bank announced the inclusion of digital assets in the back-office systems and processes of five commercial banks, such as Citi, Credit Suisse, and Goldman Sachs, as part of the second phase of Project Helvetia.

Global Exploration: Countries Exploring Central Bank Digital Currencies

By integrating the wCBDC into these banks, the SNB has taken steps to ensure its seamless incorporation into existing operations. In addition to Switzerland, various countries, including the United Kingdom, Russia, Japan, Brazil,  India, and even China, are actively investigating the potential of central bank-issued digital currencies for facilitating cross-border payments.

The International Monetary Fund (IMF) has also recently unveiled a framework for developing Central Bank Digital Currencies (CBDCs) that adhere to regulatory standards. The IMF aims to establish a global platform that enables users to engage with CBDCs.

Swiss Authorities’ Ongoing Research on CBDCs

During a distinct panel discussion held at the same conference, Andrea Maechler, the governor of the SNB, emphasized that even if Central Bank Digital Currencies (CBDCs) are implemented on a broader scale in Switzerland, physical cash will remain in circulation. 

The decision to introduce a CBDC, even in a limited test phase, demonstrates the ongoing research conducted by Swiss authorities in this field. This marks a notable shift from their previous outright rejection of blockchain-based reserves.

Switzerland, renowned globally for its leadership in the banking sector, has consistently prioritized providing its citizens with convenient and fair access to the country’s extensive resources and reserves. While Switzerland has always been receptive to exploring innovative technological solutions, whether related to financial products or other areas, safeguarding the financial stability of its citizens has remained a steadfast commitment for this small yet influential nation nestled in the Alps.

 

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Filed under: Bitcoin - @ June 28, 2023 5:04 pm