The proposal was unveiled by Swiss National Bank chief Thomas Jordan at a conference in Zurich, but the institution is still “prudent” regarding a retail CBDC.
A pilot project for a wholesale central bank digital currency (wCBDC) will be launched, the head of the Swiss National Bank (SNB) has said. According to Thomas Jordan, chair of the SNB, the pilot project will start “soon,” as quoted by Reuters. The creation of a wCBDC represents Switzerland’s investigation of possible uses for digital money.
According to Thomas Jordan at the Point Zero Forum in Zurich, the wCBDC will be issued on the Swiss SIX digital exchange and will only be available for a brief period of time. The largest stock market in Switzerland, the SIX Group, will assist in the issue and management of the wCBDC.
Thomas Moser, a member of the SNB governing board, stated last year that central bank digital currencies (CBDCs) could be a useful addition to decentralized finance (DeFi). As part of Project Helvetia, the SNB previously included a wCBDC into the back-office systems of five banks. The proof of concept for a wCBDC was already finished by this project.
The position of the SNB toward CBDCs has changed throughout time. Carlos Lenz, chief economist for the SNB, previously said that Switzerland had no plans to issue a CBDC and that blockchain was not a good platform for them. However, the SNB’s reversal and the start of the wCBDC pilot project show a change in how they are approaching the study of digital currencies.
Speaking separately from Thomas Jordan at the Point Zero Forum, SNB board member Andréa Maechler said that the country’s central bank does not anticipate the replacement of currency in Switzerland. This shows that even while the SNB is looking into digital currency options, they do not see a full move away from physical money.
Maechler previously stated the SNB’s pessimism of a retail CBDC, claiming the risks involved exceed the possible benefits. This demonstrates the cautious stance the SNB adopts when thinking about the introduction of a digital currency that the general public can use.