Swiss National Bank to Launch Wholesale CBDC Pilot: Chairman

Lavina Daryanani

At a conference in Zurich on Monday, June 26, the Swiss National Bank’s Chairman revealed that the central bank is reportedly set to issue a wholesale CBDC as a part of its pilot program. The European nation’s digital currency will be launched and tested on the SIX digital exchange. At the Point Zero Forum, Thomas Jordan said that the pilot project “was intended to be for a limited time.” He added,

“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.”

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Switzerland and CBDC: Delving into the past

Last year, the Swiss National Bank, along with the Bank for International Settlements [BIS], and the exchange SIX, completed a wholesale CBDC trial.

The project, called Helvetia, was a joint experiment by the aforementioned three entities. Other prominent commercial banks including Citi, Credit Suisse, Goldman Sachs, Hypothekarbank Lenzburg, and UBS took part in the initiative.

The experiment was carried out during Q4 2021. It focussed on the monetary policy and interbank settlements. Alongside, cross-border transactions on the test systems of SIX Digital Exchange, the Swiss real-time gross settlement system SIX Interbank Clearing, and core banking systems were tested.

Regulators, however, have not always been in favor of a digital currency in Switzerland. Board member Andrea Maechler asserted in November last year that the Swiss National Bank saw “no compelling advantage” to introduce a CBDC for the general public.

According to Maechler, a lot of unwanted “risk and volatility” would be added to the system. This is because the public could end up holding accounts with both the central bank and the commercial bank. In effect, when customers get “worried or mad with a particular bank,” they could “transfer the money overnight to the SNB,” she warned.

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