The Swiss National Bank has no plans for a digital currency, according to a recent report.
The Swiss National Bank (SNB) has no plans to launch a digital currency as a central bank (CBDC), according to a report in Handelszeitung, a Swiss weekly business publication.
SNB chief economist Carlos Lenz stated at a recent press conference held by the Swiss Bankers Association that a digital franc is unnecessary because the current payment system works well without one. Lenz also slammed blockchain technology, describing it as "very inefficient." He stated, "I don't believe a decentralised solution is optimal."
Since at least 2019, when the Swiss parliament requested that the government investigate the possibility of launching a CBDC, Switzerland has been exploring central bank digital currencies. The administration decided in December 2019 that a digital franc would be too dangerous. The country has established a climate that is favourable to blockchain entrepreneurs, with the Zug Valley being one of the world's innovation hotbeds. Diem, originally known as Libra, is a Facebook-backed stablecoin project based in Switzerland.
Despite the Swiss government's opposition to central bank digital currencies, CBDC research has proceeded in Switzerland. The Bank of International Settlements (BIS) completed a trial investigating the viability of a CBDC among financial institutions in 2020, while the SNB and the Bank of France launched “Project Jura,” a cross-border bank-to-bank CBDC experiment.
During his press conference, however, Lenz stressed that these studies are just that: studies, not implementations.
“This is not about productive implementation,” Lenz explained. “At this time, there are no plans to implement digital bank money. This is also true in the wholesale market.”
The continuous hurry to build a CBDC, according to Lenz, is akin to the terror that many in Switzerland felt when the euro was adopted.
“When the euro was established, we had comparable debates,” Lenz added. “There was also concern that payments would be paid in euros all of a sudden.”