The Swiss National Bank warns about cryptocurrencies’ volatility, supports cash, and introduces instant payments while exploring digital solutions.
The Swiss National Bank (SNB) has expressed caution regarding the growing prominence of cryptocurrencies, such as Bitcoin and Ether. During a recent event in Brugg, Switzerland, SNB Chairman Martin Schlegel acknowledged the rapid expansion of digital currencies but suggested that they still represent a niche market rather than a mainstream financial tool. He noted that although these assets have received interest, they are not yet common in daily usage.
Schlegel outlined some of the problems associated with cryptocurrencies. One issue was their fluctuating nature, which rendered them unfit for daily transactions. Many people criticized the idea of cryptocurrency because it consumes a lot of energy in mining. Moreover, Schlegel also discussed the current problems of cryptocurrencies’ operation in connection with criminal activities, such as money laundering.
However, the SNB seems on the right side of history about technological advancements. Speaking to Schlegel, it became clear that the bank is already testing the viability of CBDCs through a pilot that seeks to address the issue of interbank payments. This speaks volumes about the SNB’s development agenda for the financial structure, but it is still wary of decentralized digital currencies.
Swiss Central Bank Pushes for Speedy Payments, Defends Cash Usage
Referring to payment innovations, Schlegel mentioned the introduction of instant payments in Switzerland, which makes money transfers between accounts in a few seconds. This move is in tandem with the emerging trends of faster payment systems around the globe.
However, during the interview, Schlegel stressed that cash would remain an integral part of the Swiss economy in the foreseeable future. He mentioned the SNB’s intentions to introduce new banknotes, further supporting his notion that cash will not go anywhere anytime soon. Schlegel notes that despite innovations in payment technologies, cash is not likely to disappear from the payment environment.
While the SNB seeks new digital payment possibilities, it fears cryptocurrency threats. The bank’s management approach appears innovative within the context of the country’s financial system stability.
