Swiss National Bank: No Need for a Digital Franc

The Swiss National Bank (SNB) does not plan to issue a digital franc, although it is conducting research into CBDC (CBDC). This was stated by the institution’s chief economist, Carlos Lenz, according to Handelszeitung.

During a press conference organized by the Swiss Bankers Association (SBA), Lenz noted that the existing payment system works well and, accordingly, there is no need for a digital currency.

“All the research and pilots that the SNB is currently conducting with the Bank for International Settlements and the Banque de France relate to digital currencies for large clients, such as banks. But the issue is not product-level implementation. At present, there are no plans to deploy CBDC. This also applies to wholesale payments,” said a central-bank spokesperson.

According to him, there is no risk of the franc being displaced by other currencies if Switzerland stays out of the development of digital money. Lenz reminded that similar discussions occurred when the euro was introduced:

“There were also concerns that payments would suddenly be made in euros. But that did not happen.”

Discussing possible technological foundations for the digital franc, the economist said that theoretically there are many. One of them is distributed ledger technology.

“However, blockchain is very inefficient. I do not think a decentralised solution is ideal,” concluded Lenz.

Earlier, the Swiss government found no advantages in issuing a retail CBDC, but recognised some benefit from its wholesale variant. The SNB shared this position.