On 19 April 2023, the Embassy of Switzerland in the UK hosted an event on Central Bank Digital Currencies: Cash settlement in a tokenized asset ecosystem, with a keynote speech by Ambassador Markus Leitner. The discussion was moderated by Mrs Izabella Kaminska, Senior Finance Editor at POLITICO Europe, with Mr Matthias Jütter, SNB, Mr John Jackson, BoE, Mr Hyder Jaffrey, UBS and Mr Kunal Jhanji, BCG/ Payments Association. The discussion was followed by a lively Q&A with the audience.
Recent years have seen rapidly growing interest and dynamism around the topic of tokenized assets, Central Bank Digital Currencies (CBDC) and cash settlement in a broader sense, with central banks and players from the private sector focusing on different forms and uses.
In general terms, a distinction is made between wholesale CBDC, accessible only to commercial banks, and retail CBDC, representing an electronic form of central bank money for the use of the general public. Other forms of tokenized private money are already used for the settlement of assets. Each type of settlement medium bears its respective risks, challenges, merits and opportunities.
Both the Swiss National Bank and the Bank of England have taken a progressive stance with regard to CBDC and completed a number of pilot schemes, successfully exploring and testing technical and operational feasibility. Further progress is subject to an ongoing process, involving technical, legal and political considerations. In this context, on 19 April the Embassy of Switzerland in the UK convened a panel of experts from the public and private sectors to exchange views on the potential of this financial innovation, as well as implications for monetary policy and the overall financial system.