SNB Worried About Stablecoin Impact on Central Banks

The Swiss National Bank has expressed concerns about the impact of stablecoins on central banks. Governing board member Petra Tschudin spoke at an event in Zurich, saying that while innovation is welcome, it's essential to consider the consequences and regulation.

Tschudin noted that stablecoins operate outside the central bank system, potentially undermining the principle of uniform money everywhere. A 'stablecoin franc' would not be automatically equivalent to a real franc, she said.

The risk is that households and businesses shift their funds into stablecoins, reducing the amount of money available for lending and affecting interest rates. This would weaken a central bank's ability to steer borrowing costs through policy rate changes.