Key Points:
The Swiss National Bank extends its wholesale CBDC pilot for two more years due to "very successful" progress.
The extension aims to attract more financial institutions and expand the use of wholesale CBDC in financial transactions.
SNB's move positions Switzerland as a central bank digital currency innovation leader.
Antoine Martin, a member of the Swiss National Bank's Board of Directors, delivered an important update regarding the CBDC pilot initiative.
The SNB has confirmed that it will extend its pilot issuance project of wholesale CBDC by at least two more years. The extension came after noting the very positive development the project had made since its launch in December of the previous year. Initial plans provided for the project's end on June 30th this year; instead, it is being continued and expanded in its scope.
Martin explained that this extension will lure more financial institutions into joining the project. The SNB wants to repeat the pilot phase in an extension of wholesale CBDC use to more financial transactions, which will drive better functionality and interconnection with the financial system. It will continue testing digital currency's feasibility, security, and efficiency in wholesale banking—including interbank transactions and major financial operations.
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Switzerland Positioned as Leader in CBDC Pilot Innovation
The CBDC pilot has attracted huge interest and involvement from conceptualising the system. According to experts, the project's success is a function of its solid design and the result of efforts put in by participating institutions. The pilot should be extended for further exploration of the technology under study and the possibility of its fine-tuning according to the demands made by the preliminary evaluation of modern financial space.
It further supports a general trend in which central banks worldwide, including the Swiss National Bank, have been eyeing digital currencies. With increasing digital transactions at breakneck speeds, it is incumbent upon central banks to remain innovative and continuously adapt to maintain financial stability and efficiency. The SNB pioneers this global development by putting Switzerland at the forefront, setting a probable future precedent for countries eyeing similar initiatives.
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