Swiss National Bank Chair Jordan Discusses Two Alternatives to Wholesale CBDC

The Swiss National Bank’s (SNB) chairman of the governing board, Thomas Jordan, noted that the bank is exploring best ways to tokenize financial assets.

Speaking at an event in Basel on Monday, Jordan noted that the Swiss National Bank is investigating alternative options to its wholesale CBDC.

Outlining pros and cons of wholesale CBDC, Jordan said SNB is conducting live pilots as part of Project Helvetia III. The project was first launched in December 2023.

In the project, participating banks can use Swiss franc wholesale CBDC to settle transactions with tokenized bonds on SIX Digital Exchange (SDX).

“Settlement in central bank money is crucial for two reasons,” Chairman Jordan noted in his remarks.

“First, it eliminates credit risk and minimizes liquidity risk in settlement, thereby contributing to financial stability. And second, it reinforces the role of central bank money as the anchor for the monetary system.”

He also explained how the pilot makes tokenized central bank money available on the third-party platform. It eliminates barriers in the current siloed financial market infrastructures, Jordan added.

“This approach aims to realize the benefits of tokenization, but also poses challenges.”

Jordan outlined governance and fragmentation of central bank money as two wholesale CBDC challenges.

Jordan Touts Two Alternatives to Wholesale CBDC


Chairman Jordan stressed that the Swiss National Bank is also testing two other settlement approaches to wholesale CBDC.

“The first alternative approach is linking the tokenized asset platform with the Swiss RTGS system,” he said. “The second approach uses private token money which is issued on the tokenized asset platform and which is bankruptcy-protected and fully backed by sight deposits at the SNB.”

The real time gross settlement (RTGS) approach addresses both governance and fragmentation of central bank money challenges. However, it also uses that old way of siloing operations and synchronizing through messages, he added.

Secondly, private token “enables an integrated approach to settlement whereby money and assets would be held on the same platform.” Jordan added that this approach would address the governance, but not fragmentation challenge.

Both these approaches need careful assessment to study the benefits and risks associated with it, he noted.

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