Swiss National Bank to test digital currency
The Swiss National Bank (SNB) has announced that it will issue a Central Bank Digital Currency (CBDC) on Switzerland’s SIX digital exchange.
Speaking at a conference in Zurich, SNB Chairman Thomas Jordan announced that SNB will issue wholesale CBDC on Switzerland’s SIX digital exchange as part of a pilot program.
Emphasizing that this is not just an experiment, Jordan said: “There will be real money equivalent to bank reserves and the goal is to test real transactions with market participants.”
On the other hand, as the strong fluctuations in the markets last year increased the demands for regulation and supervision of cryptocurrencies and stablecoins, which are concerned about their reliability, it is also noteworthy that the global interest in CBDCs is intensifying. .
A DIFFERENCE FROM CRYPTO IS DEPENDING ON THE CENTER
CBDC is defined as the digital version of the official currency of a country.
The fact that they are produced on a hub basis is shown to be the most basic feature that distinguishes CBDCs from cryptocurrencies like Bitcoin. There is no central authority that manages cryptocurrencies created with distributed ledger technology and distributed through digital networks.
CBDCs have some advantages and disadvantages over physical money.
Advantages such as promoting financial inclusion by providing easy and secure access to money, improving competition and durability in internal payments, increasing efficiency and reducing transaction costs in payments, creating programmable money and improving transparency in payments. money flows, ensuring an uninterrupted and easy flow of money and motivation of the development of fiscal policy money.
THE IMF EXPECTS SIGNIFICANT EFFECTS
According to an International Monetary Fund (IMF) report on the subject, CBDCs are expected to have significant effects on monetary policy, financial stability, and the international monetary system.
The IMF report states that CBDC research has accelerated during the Covid-19 pandemic, often in response to the emergence of crypto assets.
According to data from the Atlantic Council, 114 countries representing more than 95 percent of the world economy are actively investigating CBDCs.
Although it is striking that country research in this area is intensifying, as of May 2020, only 35 countries are included in the registries that evaluated CBDCs. (AA)