The Swiss National Bank (SNB), the central bank of Switzerland, has announced the launch of its wholesale Central Bank Digital Currency (CBDC), the S-Coin, in partnership with six commercial banks. The S-Coin is the first wholesale CBDC to be launched in Switzerland and is intended to provide instant payment services to the banking sector.
The S-Coin will be operated using the Ethereum blockchain, and will initially be available to Credit Suisse, UBS, Swiss Post, Zurcher Kantonalbank, Sygnum Bank, and Falcon Private Bank for testing. The pilot program is expected to last until the end of 2022, before a full-scale rollout of the S-Coin in 2023.
The SNB believes that the development of CBDCs is important to ensure the efficient operation of the Swiss financial system. The S-Coin will run on a blockchain platform that is compliant with the Swiss Anti-Money Laundering Act and the FINMA Regulatory Act. The S-Coin will be different from any other CBDCs as it will not be backed by any underlying currency.
The SNB has stated that its primary goal in developing this technology is to create a platform that is accessible to all Swiss banks and is ready to enter mass market usage. The SNB believes that the S-Coin will open up a variety of opportunities for the banking industry such as faster payments, enhanced security, more cost efficient transactions and improved liquidity.
The SNB also believes that launching the S-Coin will lead to greater efficiency in the banking and financial sector. The S-Coin is expected to become an important part of the Swiss financial system and to improve the country’s reputation as an attractive place for banking and financial services.