Swiss Central Bank Cautious on Large Stablecoins Amid Monetary Policy Concerns

The Swiss National Bank (SNB) is taking a cautious approach to large stablecoins due to concerns they may weaken monetary policy transmission, according to Petra Tschudin, a member of the SNB's Governing Board. Speaking at an event in Zurich, Tschudin emphasized that while modernizing the payment system is reasonable, large stablecoins operating outside the existing two-tier financial system could create difficulties for the central bank to fulfill its policy responsibilities.

Tschudin noted that the SNB has been exploring the application of blockchain technology in the financial system and has issued a blockchain-based interbank digital currency since 2020. However, she reiterated that the potential benefits of issuing a retail CBDC for ordinary consumers are not sufficient to offset the related risks.

The SNB is seeking a balance between payment innovation and policy effectiveness, which has become a core issue of concern for the bank. Tschudin acknowledged that stablecoins can improve some functions of the existing financial system, such as reducing costs and improving cross-border payment efficiency, but emphasized the need to establish a regulatory framework that safeguards the central bank's policy influence.