Stablecoins pose risk to monetary policy transmission
Petra Tschudin, a governing board member of the Swiss National Bank, said on Wednesday that stablecoins could complicate the transmission of monetary policy. Speaking at an event in Zurich, she argued that large stablecoins not integrated into the existing two-tier financial system create a situation where central banks find it harder to fulfill their mandate. Her remarks reinforce the SNB's well-known skepticism toward stablecoins and crypto assets, even as the institution experiments with digital central-bank money.[S1]
The SNB has warned that stablecoins may not always deliver on their promise of at-par convertibility. However, it has also said that local financial stability risks from these assets remain small because of low volumes and limited adoption. Tschudin, who oversees the SNB's large foreign-exchange portfolio and its digital projects, spoke to professional forecasters at ETH Zurich's KOF economic research institute.[S1]
Competition and innovation: stablecoins' benefits
Tschudin conceded that stablecoins have the potential to make today's payment and financial arrangements better. In her view, firms operating across borders can move funds internationally more cheaply thanks to these tokens. She further framed the relationship between established commercial banks and stablecoin issuers as a contest, arguing that such rivalry is beneficial since it spurs innovation. Her nuanced stance stands apart from an outright dismissal of the technology.[S1]
SNB's wholesale CBDC project continues
Three years ago the SNB began releasing a blockchain-based digital currency intended for banks, known as a wholesale CBDC, and it has stated the initiative will run through at least 2028. In contrast to retail CBDC trials in China or the euro area, this tokenized money is off-limits to ordinary consumers. Tschudin restated the SNB's view that retail CBDCs carry risks exceeding their advantages. She also said usage of the SNB's CBDC remains limited, with trading volumes not especially large, and that although momentum is building, a major take-off has yet to occur.[S1]
