2 November 2024
Swiss National Bank May Not Issue A Digital Currency
The Swiss National Bank (SNB) has no plans to introduce a central bank digital currency (CBDC) anytime soon.
During a press conference hosted by the Swiss Bankers Association, Carlos Lenz, SNB’s chief economist, announced that there is no need for a digital franc because the current payment system works well without one. The chief economist also criticized blockchain technology by calling it “very inefficient.” Carlos Lenz said, “I don’t think a decentralized solution is ideal.”
While commenting in the press briefing, Lenz emphasized that studies considering CBDC are just studies, not implementations. Additionally, Carlos Lenz asserted, “there are currently no plans to introduce digital bank money. This also applies to the wholesale area.” The economist was also seen comparing the ongoing scramble to develop a CBDC to the fear that many in Switzerland felt when the euro was introduced. “We had such discussions when the euro was introduced, there was also fear that payments would suddenly be made in euros,” said Lenz.
Previously in 2019, the Swiss parliament asked the government to examine the potential of creating a CBDC. The government also concluded that a digital franc would be too risky. Despite the government’s negative stance on central bank digital currencies, Swiss CBDC research has continued.
Instead, the Bank of International Settlements (BIS) wrapped a trial testing the feasibility of a CBDC used among financial institutions, and earlier this month the Switzerland National Bank (SNB) and the Bank of France started a cross-border bank-to-bank CBDC experiment called “project Jura.”
Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.
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