Swiss National Bank plans wholesale CBDC and "stablecoin"

Wednesday 12 April 2023 13:34 CET | News

The Swiss National Bank (SNB) has announced plans to test the introduction of a wholesale CBDC and a stable-value token for payment processing as part of its "Swiss Payments Vision".

SNB has the intention to launch a true wholesale CBDC on the SIX Digital Exchange for a limited period. The financial institution will also explore the possibility of creating a private stablecoin. This digital asset would be tied to the bank's reserves and used to process financial transactions.

Wholesale CBDC and stablecoin via the SDX network

The SNB has already conducted several tests for the introduction of a central bank digital currency (CBDC) for wholesale purposes, meaning for processing payments between banks. After these tests were not completely successful, the central bank has now announced that it would like to examine further operational aspects. It would like to issue a wholesale CBDC over the SDX network for a limited period of time, which should facilitate transaction processing. This initiative will also allow the SNB to issue wholesale CBDCs to settle transactions in the future, should the need arise.

The Helvetia project

It should be noted that the pilot project for wholesale CBDCs is also the last phase of the Helvetia project. The Helvetia project aimed to explore the integration of SIX into Switzerland's real-time gross settlement system. The bank eventually decided to include a wholesale CBDC in the SDX trial. The digital currency is intended to be a means of settlement for transactions involving tokenized securities. On the other hand, the SNB wants to explore the possibility of using private money as a settlement medium for tokenized securities transactions.

Swiss National Bank plans wholesale CBDC and “stablecoin”

To achieve this goal, it plans to issue a private token currency in Swiss francs, essentially a form of a stablecoin. This would be backed by demand deposits with the central bank and the exchange rate would be set at 1:1. The aim would be to create a digital currency with a risk profile similar to that of the central bank currency. However, the SNB did not use the term "stablecoin" in its draft for its settlement token, although its properties are very similar to this form of cryptocurrency.

SNB wants to optimise payment transactions

The Swiss National Bank (SNB) relies on three principles to ensure the reliability of the Swiss payment system. Namely, the correspondence of private money with central bank money, the settlement of systemically important payments in central bank money, and the integration and interoperability between payment systems, payment solutions, and different forms of money. It is crucial for the SNB that integration and interoperability between token money and the existing payment systems are possible. This avoids fragmentation, which would endanger the unity of the Swiss franc.

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Keywords:	CBDC, product launch, digital assets, stablecoin, digital currency
Categories:	DeFi & Crypto & Web3
Companies:	Swiss National Bank
Countries:	Switzerland

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