SNB Concerned about Stablecoin Impact on Monetary Policy

The Swiss National Bank (SNB) has expressed caution regarding the use of digital stablecoins due to concerns over their impact on central banks. According to governing board member Petra Tschudin, introducing innovations like stablecoins requires careful consideration of potential consequences and regulation.

Tschudin emphasized that stablecoins operate outside the central bank system, which could undermine the principle of uniform money. She noted that a 'stablecoin franc' would not automatically be worth the same as a real franc, creating uncertainty in monetary policy transmission.

The SNB is concerned about the potential for households and businesses to shift their money into stablecoins, reducing the amount of central bank money available for lending. This could weaken a central bank's ability to steer borrowing costs through its policy rate changes.