29/10/20

SWITZERLAND: National Bank and BIS announce digital currency trial by 2020 end.

As published on coingeek.com, Thursday 29 October, 2020.

The Swiss central bank and the Bank for International Settlements have announced plans to jointly trial a central bank digital currency by the end of 2020, in the latest development in the global race to CBDCs.

The plan was revealed by Benoit Coeure of the Bank for International Settlements earlier this week at a summit in Shanghai. According to local press reports, Coeure said the Swiss National Bank and the BIS would launch the currency in proof-of-concept before the end of this year.

Head of the Innovation Hub at the BIS, tasked with researching CBDCs, Coeure said the Swiss proof of concept would be a precursor to experimenting with the currency in retail settings. The trial will also allow the banks to see how the technology syncs with existing payment systems, as well as providing more effective routes to monitoring compliance.

Coeure said the Bank for International Settlements was already working with several other international central banks on similar projects, helping develop their central bank digital currencies. Among those named were the Hong Kong Monetary Authority and the Bank of Thailand, both keen to explore CBDCs for cross-border digital currency transactions.

The announcement follows on from the partnership between the Swiss National Bank and the Bank for International Settlements, first struck back in October 2019. Welcoming the partnership at the time, the Swiss National bank said the new digital currency would be primarily used in settlement between banks and other institutions.

“This new form of digital central bank money would be aimed at facilitating the settlement of tokenized assets between financial institutions.”

The move comes at a time of increasing efforts across the world’s major central banks to move towards CBDCs, with plans already developing in China, the United States, the United Kingdom, Europe, Japan and elsewhere to launch state-backed digital currencies.