October 21, 2020

Swiss authorities favor wholesale CBDC

Swiss government finds no benefit from central bank retail digital currency issue (CBDC), but recognized the definite benefits of its wholesale option.

At the request of the lower house of parliament, the Federal Council of the country examined the benefits and risks of issuing a CBDC and concluded

“At present, the universally available CBDC will not bring additional benefits to Switzerland. Instead, it will create new risks, especially in relation to financial stability. ”

The Council noted that some economists expectfrom digital currencies to improving the efficiency of payments and monetary policy, as well as strengthening the stability of the financial system as a whole. A number of CBDC supporters are confident that its use will reduce tax crimes and help in the fight against money laundering.

According to the government, the digital franc, at best, will partially meet these expectations, and for these areas there are more effective solutions.

This position is shared by the Central Bank of Switzerland (CBS).

The Federal Council considers a more promising strategy the creation of a digital currency accessible only to financial market players.

“She will not have the same far-reachingfundamental implications like retail CBDC. The “wholesale token” issued by the Central Bank of the Central Bank may contribute to improving the efficiency of trading, settlements and securities management, ” - the government of Switzerland noted in the report.

Earlier, the Ministry of Finance and the US Federal Reserve did not find the need to issue a digital dollar, and the new head of the ECB Christine Lagarde urged not to rush to launch a digital euro.