Thomas Jordan, Chairman of the Swiss National Bank (SNB), has voiced his opposition to issuing a retail central bank digital currency (CBDC) to the general public. During an event in Zurich, he highlighted that consumers and businesses already benefit from a wide array of efficient and innovative payment options provided by the private sector.Â
Jordan pointed out the substantial changes a retail CBDC could bring to the current monetary system, including the roles of central banks and commercial banks, which might lead to extensive consequences for the financial ecosystem. He believes the risks associated with a retail CBDC outweigh the potential benefits.
Retail CBDC could fundamentally alter the current monetary system and the role of central banks and commercial banks, with far-reaching consequences for the financial system.
Thomas Jordan However, the SNB is actively exploring a wholesale CBDC, which facilitates transactions between commercial banks using central bank money, aiming to enhance the speed and reduce the costs of payments.
The SNB’s Stance on Digital Currencies
Thomas Jordan’s remarks underscore a cautious approach toward the adoption of retail CBDCs, emphasizing the importance of evaluating potential impacts on the financial system thoroughly. The SNB’s exploration of a wholesale CBDC indicates a more targeted approach to digital currency, focusing on improvements in transaction efficiency within the banking sector.
The Chairman’s concerns about the fundamental alterations a retail CBDC could cause within the monetary system highlight the complexities involved in introducing digital currencies. This caution reflects a broader debate within the global financial community regarding the best path forward in the era of digitalization.
The SNB’s trial of a wholesale CBDC suggests a keen interest in leveraging technology to optimize the existing financial infrastructure. This initiative might serve as a critical learning opportunity for the SNB and other central banks considering similar ventures, balancing innovation with financial stability.
