The Swiss National Bank’s Thomas Moser told finews.tv how the central bank is bringing technology from decentralized finance into traditional finance and said what the chances are of the bank issuing digital money for wider circulation.
Besides issuing our everyday bank notes, the Swiss National Bank (SNB) also provides financial institutions with interbank money. By year-end, it wants to issue interbank money in digital form as a pilot for participants trading on Switzerland’s digital exchange SDX, the SNB's Alternate Governing Member Thomas Moser said in an interview with finews.tv.
While the uptake of trading on SDX has been slow since its inception in 2021, a wholesale CBDC could drive business to the platform, Moser said.
Removing Counterparty Risk
Having already experimented with projects involving cross-border trading and settlement, parties including the Bank for International Settlement, the French and Swiss central banks, and the Monetary Authority of Singapore (MAS) are now also using an open blockchain and decentralized (defi) protocols to experiment with foreign exchange settlement.
On a decentralized exchange, buyers and sellers can interact directly with the algorithm to place and settle trades instantaneously, rather than have their orders matched via a third party. «This is something that has been invented in decentralized finance and we are now applying it in traditional finance for exchanging wholesale CBDC,» Moser said.
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