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Swiss CBDC Pilot to Launch with ‘Real Money’: Report

Swiss National Bank to Launch Wholesale CBDC Pilot

• The Swiss National Bank (SNB) will launch a wholesale central bank digital currency (wCBDC) pilot project soon.
• Thomas Jordan, head of the SNB, announced the project at a conference in Zurich.
• The SNB is “prudent” about issuing a retail CBDC but has not ruled out its introduction.

Project Helvetia: Testing Real Transactions

The wCBDC will be issued on the Swiss SIX digital exchange and run for a limited time, according to Thomas Jordan. The SIX Group also runs Switzerland’s largest stock exchange. This project, called Project Helvetia, will allow the SNB to test real transactions with market participants using real money equivalent to bank reserves.

SNB’s Position on CBDCs

The SNB integrated a wCBDC into the back-office systems of five banks early last year as part of Project Helvetia, which had previously completed a proof of concept for wCBDC. Last year SNB chief economist Carlos Lenz said that blockchain was not suitable platform for CBDC and the country had no intention of issuing one. However, Thomas Moser told Cointelegraph that CBDCs could work well with decentralized finance.

Retail CBDC: Prudence Is Necessary

Thomas Jordan said that while the SNB is “a little bit prudent at the moment” regarding retail CBDC, he did not rule out its introduction in future. Andréa Maechler also said at another event at Point Zero Forum this year that the central bank does not foresee cash being replaced by retail CBDC anytime soon; they believe “the risks outweigh the benefits” in regard to it.

Bottom Line

The Swiss National Bank is taking positive steps towards introducing digital currencies into their economy by launching a wholesale central bank digital currency pilot project soon with real money equivalent to bank reserves available for testing by market participants. While cautious about introducing a retail central bank digital currency due to potential risks involved, they are open to exploring such options in future if proven beneficial for their economy and citizens alike.