Swiss National Bank Chair Thomas Jordan has recently discussed two potential alternatives to a wholesale Central Bank Digital Currency (CBDC). The first option explored was a retail CBDC, available for general public use. This could potentially foster innovation and usability in the financial services sector, while still ensuring transactions are secure and cost-effective. However, concerns were raised about the implications for financial stability and the potential for bank disintermediation.
The second option discussed was a token-based system. Here, the CBDC would be represented by digital tokens that could be transferred between users without an intermediary. This system promises benefits such as heightened security and reduced transaction costs. Yet, it may need considerable technological infrastructure and regulatory safeguards to implement.
It’s worth noting that Chairman Jordan reiterated that these explorations are purely theoretical at this point, with the Swiss National Bank having no immediate plans of issuing a CBDC. He emphasized the need for further research on the possible implications and practical feasibility of these alternatives before any decisive actions are taken.
