Will the Swiss franc soon only exist digitally?
Unlike a few decades ago, when most payments were made with coins and banknotes, today there are many digital payment methods available and payments are often made without cash. With increasing digitalisation, which is also affecting the payment system, central banks, too, are continuing to develop their payment methods.
Central bank digital currency (CBDC) is digital central bank money that could in future supplement the forms of central bank money commonly used today – cash and sight deposits at the central bank. There are two quite distinct types of CBDC: retail CBDC and wholesale CBDC.
Will it soon be time for the Swiss National Bank to introduce a digital franc?
Retail CBDC is digital central bank money made available to the general public. It can be used by both individuals and companies for day-to-day transactions and as a store of value.
Depending on its design, the introduction of retail CBDC could have far-reaching consequences for the financial system, for monetary policy and for financial stability – it could, for example, reduce deposits at banks, and increase the cost banks pay to obtain money and remain liquid. This could make it more difficult for the central bank to implement its monetary policy, since monetary policy measures would be less effectively passed on via banks.
Furthermore, the introduction of a retail CBDC would entail major changes for the economy. Switzerland already has a modern and reliable payment system. There are established electronic options for payments between private individuals and companies. And, by introducing instant payments, the SNB has laid the foundation for the settlement of payments in real time and in central bank money. For these reasons, the SNB currently does not see any clear advantages for the general public in its issuance of a digital franc.
Wholesale CBDC is a digital form of central bank money available exclusively to financial institutions such as banks. In other words, access to wholesale CBDC is limited.
The SNB believed early on that digital base money, especially in the form of wholesale CBDC, could offer added value, allowing payments between financial institutions also to be effected in central bank money on a blockchain. It is therefore involved in a variety of projects in this area. The aim of pilot projects is to examine whether wCBDC can increase the efficiency and security of the financial system, as well as of international payments, and to determine whether this digital form of central bank money could contribute to a further modernisation of the payment system.
Since wholesale CBDC could reduce the complexity of cross-border payments and allow direct transactions between banks, the costs and risks of international payments would also decrease. However, the projects undertaken to date by the SNB and other central banks are still purely experimental.
Retail CBDC
- What is it used for? Everyday payments such as online purchases and transfers
- Who can use it? Individuals and companies
- Advantages: No clear advantages. Besides cash, companies and individuals already have a variety of cashless payment instruments at their disposal
- Risks: Possible danger to financial stability; requires major change-over and costs for the economy
Wholesale CBDC
- What is it used for? Payments between financial institutions (e.g. banks)
- Who can use it? Only financial institutions
- Advantages: Possible increase in efficiency and security of the financial system
- Risks: Unclear whether its introduction would really lead to the modernisation of the payment system
Current projects
In Project Helvetia, the SNB is testing how central bank money for payments between financial institutions can be made available for transactions on a blockchain. To this end, the introduction of wholesale CBDC into the existing financial system has also been tested. The project was extended for two years at the end of June 2025. This does not mean, however, that the SNB will introduce wholesale CBDC on a permanent basis. With the Helvetia pilot, the SNB is supporting innovation on the Swiss financial market. The SNB is also participating in cross-border CBDC projects, including Project Agorá, which is led by the BIS Innovation Hub.
Crypto currencies
Unlike CBDC, cryptocurrencies are issued on a decentralised basis by a network of users or by clearly identifiable companies. Cryptocurrencies are not pegged to a national currency. Their value is very volatile because supply cannot react flexibly to demand, and as a result they can gain or lose sharply in value within a short period of time. In addition, cryptocurrencies generally aim to create a means of payment that is independent of the state and functions without the need for either a central bank or traditional banks.
Stablecoins are a category of cryptocurrencies that are predominantly pegged to established currencies, such as the US dollar or the euro. This pegging is intended to keep their value stable. Unlike CBDC, stablecoins are issued by private companies rather than by a central bank.
What about the future of cash?
In Switzerland, cash continues to play an important role (Payment Methods Survey of Private Individuals 2025). The SNB is legally obliged to ensure the supply and distribution of cash in Switzerland, and will continue to fulfil this mandate.
Good to know
The Swiss National Bank regularly conducts a survey on payment methods of private individuals in Switzerland (Payment Methods Survey of Private Individuals). Use of cash for payments at physical points of sale has declined in recent years, while the use of cashless payment methods has continued to increase. The debit card is now the most frequently used payment method. Mobile payment apps, in particular, continue to gain in popularity. Despite this development, a large majority of the population wants cash to continue to be available as a payment method.
