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Swiss National Bank Reveals Plans for Wholesale Central Bank Digital Currency (CBDC)

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It is reported that last week, Swiss National Bank (SNB) outlined its Swiss payment vision. The central bank has conducted various wholesale central bank digital currency (CBDC) te

Swiss National Bank Reveals Plans for Wholesale Central Bank Digital Currency (CBDC)

It is reported that last week, Swiss National Bank (SNB) outlined its Swiss payment vision. The central bank has conducted various wholesale central bank digital currency (CBDC) tests. It now plans to release a true wholesale CBDC on SIX Digital Exchange (SDX) within a limited time frame. It is also exploring a private token backed by central bank reserves as a potential solution to financial transactions.

Switzerland plans to pilot stable currency and real-time wholesale CBDC

The Swiss National Bank (SNB) recently revealed its plans for the release of a wholesale central bank digital currency (CBDC) on the SIX Digital Exchange (SDX) within a limited time frame. This move follows the central bank’s successful tests of various wholesale CBDCs, and its exploration of a private token backed by central bank reserves for financial transactions.

What is a Wholesale Central Bank Digital Currency (CBDC)?

A CBDC is a digital form of a central bank’s currency, issued and backed by the central bank. A wholesale CBDC is primarily targeted at financial institutions, such as banks and payment service providers, for use in interbank settlements and other financial transactions. Retail CBDCs, on the other hand, are aimed at the general public for everyday payments and transactions.

Swiss National Bank’s CBDC Tests

The SNB conducted several tests of wholesale CBDCs in collaboration with the Bank for International Settlements (BIS) and other central banks. The tests aimed to assess the viability and effectiveness of using CBDCs for interbank settlements.
The SNB’s tests highlighted the potential benefits of using CBDCs for financial transactions, such as faster settlement times, improved efficiency, and reduced costs.

Swiss Payment Vision

The SNB’s plans for a wholesale CBDC on the SDX are part of its broader Swiss payment vision. This vision aims to improve the efficiency and resilience of Switzerland’s payment system, while maintaining trust and confidence in the country’s currency.
The wholesale CBDC is expected to play a crucial role in achieving this vision, as it will enable faster and more secure interbank settlement and other financial transactions.

Private Token Backed by Central Bank Reserves

In addition to its plans for a wholesale CBDC, the SNB is also exploring the potential of a private token backed by central bank reserves. This token would be aimed at providing an alternative solution for financial transactions.
The SNB believes that a private token could offer several advantages over traditional payment solutions, such as faster and cheaper cross-border transactions, increased interoperability, and enhanced user privacy and security.

Conclusion

The SNB’s plans for a wholesale CBDC on the SDX, and its exploration of a private token backed by central bank reserves, are part of its broader efforts to modernize and improve Switzerland’s payment system. These initiatives have the potential to increase efficiency, reduce costs, and enhance the resilience and trust in Switzerland’s currency.
Overall, it is expected that the implementation of a wholesale CBDC, alongside the exploration of alternative payment solutions, will promote innovation in the Swiss payment system and provide significant benefits to users.

FAQs

**Q:** What is a CBDC?
**A:** A CBDC is a digital form of a central bank’s currency, issued and backed by the central bank.
**Q:** What is a wholesale CBDC?
**A:** A wholesale CBDC is primarily targeted at financial institutions, such as banks and payment service providers, for use in interbank settlements and other financial transactions.
**Q:** What are the benefits of using CBDCs for financial transactions?
**A:** The benefits of using CBDCs include faster settlement times, improved efficiency, and reduced costs.

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