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 Bank for International Settlements would launch the currency in proof-of-concept before the end of this year. The 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 new digital currency would be primarily used in settlements between banks.
Coeure said the BIS was already working with several other international central banks on similar projects, developing 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 from the partnership between the Swiss National Bank and the BIS in October 2019. Welcoming the partnership at the time, the Swiss National bank said the new digital currency would be primarily used in settlements between banks and other institutions.
Central banks continue to explore CBDCs.
Central banks across countries are experimenting with some sort of national digital currencies. Earlier, the U.S. Federal Reserve chairman, Jerome Powell, suggested the United States was waiting to get the right proposals in place, rather than becoming the first to launch in regard with a CBDC. Several other major central banks, including the Bank of Japan, the Philippines’ central bank, are working on a CBDC. As reported earlier, the Caribbean island Bahamas became the first nation to launch its central bank-backed digital currency. The central bank of Bahamas partnered with several local financial institutions on the rollout, including electronic payment firm Kanoo, mobile money company Cash N Go and e-commerce platform MobileAssist.