- The member of SNB, Andrea Maechler stages against digital Franc.
- However, she further stated that SNB is interested in developing Wholesale CBDCs.
- Switzerland had initiated the wholesale CBDC concept back in Q4 2021.
As the world was gripped by the craze of decentralized cryptocurrencies, many central banks around the world decided to deploy their own native currencies in a decentralized format, generally known as Central Bank Digital Currency (CBDC).
However, a member of Swiss National Bank (SNB), Andrea Maechler, stated against the favor of traditional CBDCs. A report from Reuters showed that the governing member of SNB was found quoting against traditional CBDCs as she mentioned that risks of CBDCs outweigh the benefits of tokenization of the given currency.
Furthermore, she added that CDBCs would not help in delivering a more inclusive financial institution and would likely not help the citizens in their daily day-to-day transactions as the majority of the working population already had access to bank accounts.
Maechler clearly mentioned that SNB was still interested in CBDC, however the central bank would focus more on taking a look at the prospectus offered by wholesale CBDCs. Further on, she reiterated that central banks would need to address privacy concerns and the potential of a decentralized token currency to be used for illicit purposes.
The statements come across as the Swiss national bank had announced the integration of a wholesale CBDC into its banking systems where it implemented the system between 5 commercial banks in the country. Maechler encouraged the implementation while stating that central banks needed to stay ahead & at the top of technological changes happening throughout the world.
The wholesale CBDC was part of the second part of the pilot program, called project Helvetia.
The project aims to prepare various central banks for distributed ledger technology attributed to tokenization of financial assets, launched in Q4 2021. The system was implemented between various banks like Goldman Sachs, UBS & Citi.
If debuted successfully, the wholesale CBDCs would fasten the transaction speeds between banks, while also increasing interoperability between banks & central banks. Apart from experimenting with wholesale CBDCs, the country was also a major spot for crypto centric projects. The Swiss Financial Market Supervisory Authority permitted one of its first crypto centric funds called the Crypto Market Index Fund to hit the trading grounds earlier in Sep 2021.