Report: Swiss National Bank Sees No Need For CBDC

Carlos Lenz, chief economist of the Swiss National Bank, told a news conference the bank sees no need for a digital franc, even though it is studying how one would work, Handelszeitung reported.

“The current payment system works well,” he said, according to a Google Translate treatment of a German-language article in the Swiss publication. The name of the publication translates to English as “commerce newspaper.”

“There are currently no plans to introduce digital central bank money,” Lenz said, per the report. “This also applies to the wholesale area.”

Lenz also said he is not worried about the status of the Swiss franc even if neighboring countries introduce digital versions of their paper currencies, according to the report.

“We had such discussions when the euro was introduced,” he said, according to Google Translate’s handling of his remarks. “There was also fear that payments would suddenly be made in euros” — but that didn’t happen.

As for whether a blockchain approach might work better than a centralized approach if authorities were to pursue producing a digital franc, he reportedly said: “Blockchain is very inefficient. I don’t think a decentralized solution is ideal.”

The Handelszeitung report went on to quote another Swiss banking executive who said the country eventually will use a digital franc in at least some instances — the only question is when.

Earlier this month, banking officials in Switzerland and France announced what they are calling “Project Jura,” an initiative to explore whether central bank digital currencies (CBDCs) might be appropriate for wholesale transactions.

“The Eurosystem is engaging in innovation and adapting its actions to the strong trend towards the digitalization of payments,” Sylvia Goulard, deputy governor of the Banque de France, said at the time. “The Banque de France is convinced of the potential benefits of wholesale central bank digital currency to provide maximum security and efficiency in financial transactions and opened last year an experimental program to make progress in this area.”