The Swiss National Bank (SNB) is actively exploring the tokenisation of financial assets to bolster payment security and efficiency, as stated by Chairman Thomas Jordan. This initiative aims to leverage digital tokenisation, which encapsulates the digital representation of financial asset claims on a programmable platform, often based on distributed ledger technology.

Jordan highlighted the need for central banks to determine their approach to these advancements, which are touted to expedite and reduce the cost of payments. Central banks face a choice: adopt a cautious ‘wait-and-see’ approach, forge ahead independently, or engage incrementally with market participants to discover optimal solutions for settling tokenised asset transactions through practical experiments.

The SNB is leaning towards the latter, engaging in a stepwise exploration of the potential risks and benefits. The Helvetia III project exemplifies this approach, enabling the use of tokenised central bank money for transaction settlements, already implemented in four bond issuances by Swiss local governments.

Jordan emphasized the SNB’s role in aiding the private sector’s investigation into how tokenisation can enhance the existing financial system. The pioneering issuance of wholesale Central Bank Digital Currency (CBDC) on a regulated third-party platform is a testament to the SNB’s dedication to fostering technical innovation while maintaining prudent and responsible practices.

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