The Swiss National Bank (SNB) and the Bank for International Settlements (BIS) signed an agreement on October 8. They agree to dedicate two innovation hubs to blockchain technology. In focus: a digital central bank currency.
The Bank for International Settlements (BIS) and the Swiss National Bank (SNB) are investigating the possibilities of a digital central bank currency on a blockchain basis. The technology, which is underlying Bitcoin and other crypto currencies, can also serve as a basis for digital central bank money. It is precisely because of its properties of being transparent, forgery-proof and verifiable that it is suitable for this purpose.
According to a press release issued by the SNB and the BIS, they plan to set up hubs in Switzerland, Hong Kong and Singapore in order to investigate “key technology trends” in the central banking sector.
The blockchain hub in Switzerland will initially focus on two points. The first will focus on these blockchain-based solutions for central bank money:
A new form of digital central bank money would aim to facilitate the settlement of tokenised assets between financial institutions. […] The project is part of a collaboration between the SNB and the SIX Group in the form of a proof of concept.
The second project will examine the challenges facing central banks when it comes to electronic markets. These challenges arose both from the progressive automation and fragmentation of the financial markets and from the increased use of new technologies. Thomas J. Jordan, Chairman of the Governing Board of the Swiss National Bank, explains:
For some time now, the SNB has been closely following the digitalisation of the financial sector and the technological innovations in the areas it manages. Cooperation at the BIS Innovation Hub Centre in Switzerland enables the SNB to further expand its competence in the area of financial markets and their infrastructures. We look forward to strengthening our cooperation with the BIS and other central banks in this area.
Bitcoin and Blockchain in Switzerland
In the past, Switzerland has continued to be the focus of the Bitcoin community. The establishment of the Libra project by Facebook has led to discussions in the community. Most recently, Thomas Jordan, head of the Swiss central bank, was critical of the project and saw it as a threat to financial stability.
