Swiss National Bank Chairman Thomas Jordan, while dismissing the need for a retail central bank digital currency (CBDC), stood for efficient payment instruments available in the private sector.
Jordan also highlighted problems with the new system, pointing out that risks were causing unintended disruptions to current operations. Conversely, The SNB focused on this new type of CBDC, which could make interbank settlement more efficient in the current situation.
Under the Project Helvetia III initiative conducted by the SNB, four bond issues were settled using wholesale CBDCs, which exhibited the simple solution of transaction settlement. Jordan emphasized the advantages of central banks printing their money instead of using unsafe asset settlements.
However, the key questions that need addressing when considering adopting wholesale CBDC are overnight holding, compensation, and access for financial institutions.SNB’s reflection equals an examination of reports and wholesale CBDCs using the Swiss franc.
The SNB’s consideration suggests that the central bank will lean towards a cautious approach to CBDC implementation. This preference will only come after resolving operational challenges and thoroughly evaluating the pros and cons of wholesale implementation.
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