Switzerland’s central bank, the Swiss National Bank (SNB), is actively incorporating decentralised finance technology into traditional finance and considering the issuance of digital money for broader circulation, according to Thomas Moser, an Alternate Governing Member of the SNB. In an interview with finews.tv, Moser revealed that the SNB plans to introduce digital interbank money as a pilot project by the end of the year, specifically targeting participants trading on Switzerland’s digital exchange, SDX.
Moser believes that the implementation of a wholesale Central Bank Digital Currency (CBDC) could significantly boost business on SDX, which has experienced sluggish trading activity since its establishment in 2021.
To reduce counterparty risk and explore innovative approaches to foreign exchange settlement, various institutions such as the Bank for International Settlement, the French and Swiss central banks, and the Monetary Authority of Singapore (MAS) have ventured into open blockchain and decentralized protocols within the realm of decentralized finance (DeFi).
The concept of decentralized exchanges enables buyers and sellers to directly engage with algorithms, facilitating immediate trade placement and settlement without relying on intermediaries. Moser emphasized that this concept originated from decentralized finance and is now being adapted for traditional finance to facilitate the exchange of wholesale CBDC.