Switzerland's journey towards implementing a public central bank digital currency (CBDC) appears to be on hold, as the Swiss National Bank (SNB) Chair, Thomas Jordan, suggests that the risks currently outweigh the potential benefits. According to Reuters, Jordan expressed this sentiment during an event held in Zurich.

Jordan emphasized the existence of numerous efficient and innovative payment solutions already available to both consumers and businesses within the private sector. He cautioned against the introduction of a retail CBDC, highlighting its potential to significantly reshape the existing monetary framework.

"Retail CBDC could fundamentally alter the current monetary system and the role of central banks and commercial banks, with far-reaching consequences for the financial system," remarked Thomas Jordan.

The SNB has been actively engaged in conducting trials involving wholesale CBDC, enabling transactions using central bank funds between commercial banks such as UBS and Zuercher Kantonal Bank. These trials aim to expedite and reduce the cost of payments. However, Jordan noted that there are unresolved issues surrounding the technology's early stages. Key concerns include the feasibility of overnight holding of Swiss franc digital central bank funds, methods of remuneration, and determining eligible financial institutions.

The cautious stance adopted by the SNB aligns with similar sentiments expressed by other financial regulators. In March, Sweden's central bank, Riksbank, issued a research note cautioning about potential risks associated with CBDCs, particularly concerning unsynchronized data in offline transactions. The Riksbank stressed the importance of synchronizing offline transactions with online balances to address concerns regarding liquidity risks from shadow wallets and intermediary nodes facilitating connections between offline and online wallets.