Swiss National Bank Extends Wholesale CBDC Pilot Program by at Least Two Years

UTC by Steve Muchoki · 3 min read
Swiss National Bank Extends Wholesale CBDC Pilot Program by at Least Two Years
Photo: Depositphotos

The Swiss National Bank (SNB) was to close its ongoing wholesale CBDC program by June 30, but more institutions will join the pilot project instead.

Amid the heightened adoption of blockchain technology and web3 payments, the Swiss National Bank (SNB), the central bank of Switzerland that is responsible for the nation’s monetary policies, has announced that it will extend the digital Franc pilot program to at least 2026.

According to a report by Bloomberg, the SNB’s Governing Board member Antoine Martin noted that the bank will continue with its ongoing wholesale Central Bank Digital Currency (CBDC) pilot program in the coming years.

The SNB’s wholesale CBDC pilot program began last December and was scheduled to end by June 30 this year, but has turned out to be a huge success. Ahead, the SNB is now determined to add more institutions as participants in the wholesale CBDC pilot program.

“The future success of the pilot project will largely depend on whether new financial market participants join, whether the volume of transactions increases, and whether additional financial market transactions are settled on this platform,” Martin said.

The SNB bank has been working with the Swiss stock exchange provider SIX and several other commercial banks led by UBS Group AG and Commerzbank AG. Meanwhile, Martin highlighted that the bank’s commitment to extend the pilot program does not guarantee the ultimate launch of the digital Franc.

Moreover, the overall demand for the digital Franc will determine whether the SNB launches the wholesale product.

During the wholesale CBDC program, the SNB made at least five bond issuances on SIX’s digital exchange in Zurich, including a $226 million settlement for a World Bank bond earlier this month.

Swiss National Bank Competes for Global Reserve Status

The race to dethrone the United States dollar as the reigning global reserve currency has recently escalated through the use of CBDCs. As Coinspeaker recently reported, more global central banks are already exploring the launch of a CBDC. However, more regulators in the United States have expressed concerns over the Fed-backed CBDC due to privacy implications.

To date, several central banks around the world led by the People’s Bank of China have already rolled out retail CBDCs.

The Chinese government continues to use the digital Renminbi (RMB) to advocate for the ongoing de-dollarization. Moreover, China is at the forefront of the BRICS movement, which has significantly posed a threat to the GZ nations.

The SNB intends to attract more financial institutions to use its wholesale CBDC based on its security and privacy policies. Furthermore, Switzerland has gained a reputation in the past for providing top-notch banking services free from global geopolitical interference.

The ongoing development and rollouts of different CBDCs are a huge boost for the web3 industry and crypto assets. With the use of CBDCs, more institutions can seamlessly provide crypto-related services to more customers around the world.

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