The Swiss National Bank (SNB) has no plans to introduce a central bank digital currency (CBDC), according to a report in the Swiss business weekly Handelszeitung.
At a recent press conference organized by the Swiss Bankers Association, SNB chief economist Carlos Lenz announced that a digital franc was not needed because the current payment system works well without . Lenz also criticized blockchain technology, calling it “very inefficient”. “I don’t think a decentralized solution is ideal,” he said.
Switzerland has been studying central bank digital currencies since at least 2019, when the Swiss parliament asked the government to consider the potential for creating a CBDC. In December 2019, the government concluded that a digital franc would be too risky. The country has created a friendly environment for blockchain startups with the Zug Valley among the global hotbeds of innovation. Diem, the Facebook-backed stablecoin project formerly known as Libra, is also based in Switzerland.
Despite the Swiss government’s negative stance on central bank digital currencies, research by the Swiss CBDC continued. In 2020, the Bank for International Settlements (BIS) completed a trial testing the feasibility of a CBDC used by financial institutions, and earlier this month the SNB and Banque de France launched a cross-border bank-to-bank CBDC experiment called “Project Jura”.
But during the press comments, Lenz stressed that these studies are just that – studies, not implementations.
“This is not about implementing at a productive level,” Lenz said. “There are currently no plans to introduce digital banking currency. This also applies to the field of wholesale.
Lenz compared the scramble develop a CBDC to the fear that many Swiss felt when the euro was introduced.
“We had such discussions when the euro was introduced,” Lenz said. “There was also the fear that payments would suddenly be made in euros.”