Introduction of a Swiss hybrid CBDC: Opportunities for the Swiss payment service provider industry to adapt to machine economy and IoT

Abstract

The privately issued cryptocurrencies are fast developing since the introduction of the concept of bitcoin in 2008. Feasibility of the successful operations of cryptocurrencies is reality-proof since 2009 and onwards. With the adoption of cryptocurrencies within a society the unique features of this type of currencies are more broadly understood. These features include in many cryptocurrencies trustlessness, immutability, and decentralization. Some even aim at providing a price-stable nomination, these types of cryptocurrencies are typically categorized as stablecoin. Privately issued cryptocurrencies nevertheless are considered to some extent risky. Hindered exchange into legal tender, technical failure, as well as mismanaged liquidity could outtake a privately issued cryptocurrency. The counterweight to this risk would be a state-issued cryptocurrency. To be able to fully harvest the unique features such as smart contracts could highly benefit the society. New handling of money flows derives from automated business logic execution attached to smart contracts. These considerations give rise to multiple campaigns of central banks to explore the feasibility, risks, and opportunities of such a technology adoption.To draw clear lines within this master thesis the distinction is made that a central bank digital currency (CBDC) must be issued by a central bank and in conclusion offer a direct claim of CBDC holders on the issuing central bank. There are three architecture types of CBDC: wholesale CBDCs, hybrid CBDCs, and retail CBDCs. These concepts describe the eligible CBDC accessors and handling parties of the transactions....