Swiss National Bank: Large stablecoins could weaken monetary policy transmission

# What the SNB said

At an event in Zurich on September 30, 2026, Swiss National Bank Governing Board member Petra Tschudin warned that large stablecoins could interfere with how monetary policy reaches the real economy. Her recommendation: regulation that preserves central banks' ability to influence borrowing costs.

# How monetary policy transmission works

Monetary policy transmission is the chain of effects that starts when the central bank changes its policy rate. Commercial banks respond by adjusting loan and deposit rates, which then change borrowing and spending by households and businesses. That chain depends on a two-tier financial system with the central bank at the top and commercial banks as intermediaries.

Tschudin's point is that stablecoins operate outside that structure. If money flows out of bank deposits and into stablecoins, the path central banks use to influence lending rates can become weaker.

# Specific risks the SNB identified

The SNB's July 2026 financial stability report listed two concrete risks:

• Run risk: A stablecoin with inadequate reserves could face rapid redemptions it cannot meet, creating market stress.

The report also noted that, for Switzerland, the domestic market for Swiss-franc stablecoins remained small as of mid-2026, with total market capitalization below $50 million. Given that size, the SNB judged immediate domestic risks manageable.

# Regulatory response underway in Switzerland

Switzerland is moving to regulate fiat-backed stablecoins through a new license category called a "payment instrument institution," which will be introduced as part of amendments to the Financial Institutions Act. The aim is to set rules for issuers of stablecoins so they operate within a framework that preserves monetary-policy control and financial stability.

# The SNB's technological alternative: Project Helvetia III

Alongside rules for private stablecoins, the SNB continues to test a public alternative. Project Helvetia III is an experiment with a wholesale central bank digital currency (wCBDC) — a tokenized form of central bank money for use between financial institutions. The project has been extended through at least 2028.

# Practical implications

• For policy makers: The SNB's statements signal a push to ensure stablecoin issuance does not erode central-bank tools. Lawmakers will need to translate that into licensing, reserve and redemption standards, and oversight.

• For banks: Continued outflows into stablecoins could reduce deposit bases and change how banks respond to policy-rate moves.

# Bottom line

The SNB is not rejecting stablecoins outright. It recognizes potential payment benefits, including lower-cost cross-border transfers. The bank's stance is that rules are necessary so that stablecoins can coexist with central-bank tools without weakening the mechanisms that control borrowing costs.