SNB Warns Stablecoins Could Undermine Monetary Policy

Switzerland's central bank is concerned that stablecoins could complicate the transmission of monetary policy, one of its governing board members said. Petra Tschudin emphasized that large stablecoins not integrated into the existing financial system make it harder for central banks to fulfill their mandate.

Tschudin noted that while modernizing the payment system is sensible, the SNB's view on stablecoins and crypto assets has been pronouncedly skeptical. The institution has experimented with digital forms of central-bank money, including issuing a blockchain-based wholesale CBDC three years ago.

The policymaker stressed that stablecoins can also improve the current financial system by allowing international companies to send money around the world at lower costs. However, she reiterated the SNB's view that the benefits of retail CBDCs do not outweigh the risks and added that their tokenized currency has seen limited volumes.

The Swiss National Bank is cautious about the impact of stablecoins on monetary policy, reflecting concerns shared by other central banks around the world. The SNB's stance highlights the ongoing debate over the role of stablecoins in modernizing payment systems and their potential implications for financial stability.