Swiss National Bank Chairman Cautions Against Retail CBDC Rollout for Public

The proposed introduction of a retail central bank digital currency (CBDC) has drawn criticism from Thomas Jordan, head of the Swiss National Bank (SNB), who expressed concerns that the dangers involved would exceed the rewards. Jordan stressed the SNB’s existing position at a Zurich event, signaling a lack of urgency in making CBDCs available to the general public, as reported by Reuters.

Jordan emphasized the variety of effective payment options currently offered by the private sector, implying that both consumers and companies profit from a wide choice of cutting-edge payment instruments. He issued a warning, stating that the implementation of a retail CBDC may cause major alterations to the present monetary system, perhaps changing the functions of commercial banks and central banks and having a huge impact on the financial system.

Exploring Wholesale CBDCs

For the most part, the SNB has been investigating the wholesale CBDC market even if it seems cautious about retail CBDCs. In order to better serve major transactions between financial institutions only, the bank launched a trial program for a “wholesale” CBDC last year. Jordan explained why this is important and that it is more than an experiment since it uses actual money that is the same as bank reserves to make transactions with market players easier.

Jordan recently discussed the possibility of issuing wholesale CBDCs in Swiss francs on a third-party platform, which would provide a safe and effective way to settle tokenized assets. The aforementioned declaration highlights the SNB’s dedication to investigating novel paths in the realm of digital currencies, all the while exercising caution while handling the intricacies linked to retail CBDCs.