Swiss National Bank Explores Transaction Settlement With Tokenized Assets

According to Bloomberg, the Swiss National Bank (SNB) is exploring the use of tokenized central-bank money for transaction settlement. The institution's wholesale Central Bank Digital Currency (CBDC), which operates on the infrastructure of Swiss stock-market provider SIX, allows banks to use tokenized central-bank money to settle transactions such as bond purchases on the same platform. This method eliminates credit risk and enables users to leverage digital assets, potentially offering features like programmability. SNB's President, Thomas Jordan, spoke at a Bank for International Settlements conference in Basel on Monday. He outlined two other approaches to transaction settlement with tokenized assets that the SNB is considering. However, he noted that both methods have their pros and cons. The Real-Time Gross Settlement (RTGS) link might limit the potential to enhance the current system, while the backed private token money could pose regulatory challenges as it isn't a direct claim on the central bank but would be used as such. Jordan did not specify whether the SNB's pilot CBDC project would continue beyond its current end-date in June. He previously stated that the project has been successful so far.