‘The risks outweigh the benefits’ of a Swiss CBDC, says SNB governing board member

Andréa Maechler, a member of the governing board for the Swiss National Bank, or SNB, has reportedly altered her position on the central bank issuing a digital franc. 

According to a Tuesday report from Reuters journalist John Revill, Maechler said officials at the country’s central bank “believe the risks outweigh the benefits” when it comes to CBDCs. The governing board member said having the general public use a digital franc in day-to-day transactions would likely not help to promote financial inclusion in Switzerland, where almost all the working population already have access to bank accounts.

“This does not mean the SNB is not interested in CBDC, but our focus is to look at the role that wholesale CBDCs could play,” said Maechler, adding the central bank needed to consider privacy concerns and the potential for the digital currency to be used for illicit transactions.

The governing board member’s statement comes following the SNB announcing it had integrated a wholesale CBDC into the banking systems of five commercial banks in Switzerland. At the time, Maechler seemed to encourage the rollout, saying “central banks need to stay on top of technological change“ in an effort to ensure monetary and financial stability.

Testing the introduction of a wholesale CBDC was part of the second phase of Project Helvetia, an initiative aimed at preparing central banks for distributed ledger technology-based tokenized financial assets. During the fourth quarter of 2021, the SNB integrated the wholesale CBDC into the existing systems and processes of Citi, Credit Suisse, Goldman Sachs, Hypothekarbank Lenzburg and UBS.

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Switzerland was also a testing ground for many crypto projects and products in 2021. In September, the Swiss Financial Market Supervisory Authority approved one of the first crypto funds to operate in the country, the Crypto Market Index Fund. The SIX Swiss Exchange currently lists several crypto exchanged-traded products in addition to its own plans to launch a digital asset marketplace and central securities depository.