Speech  Embargo 5 September 2019, 6.00 pm  Currencies, money and digital tokens 30th anniversary of the WWZ and VBÖ, University of Basel  Thomas J. Jordan* Chairman of the Governing Board Swiss National Bank Basel, 5 September 2019 © Swiss National Bank, Zurich, 2019 (speech given in German)  *  The speaker would like to thank Oliver Sigrist for his support in preparing this speech. He also thanks Simone Auer, Nicolas Cuche-Curti, Matthias Gubler, Christoph Hirter, Carlos Lenz and Alexander Perruchoud, as well as SNB Language Services. Page 1/7  Ladies and gentlemen It is a great pleasure, and an honour, to be invited to speak to you today, on the occasion of the 30th anniversary of the University of Basel’s Faculty of Business and Economics (WWZ) and the Vereinigung Basler Ökonomen (VBÖ). I congratulate you wholeheartedly on reaching this milestone. There is a long-standing and close association between the Swiss National Bank (SNB), on the one hand, and the WWZ and the University of Basel on the other. Many SNB economists were trained here and some of our staff regularly give lectures at the WWZ. I would like to thank the University of Basel and the organisers for inviting me to this special event. I am sure that the ties between our institutions will continue to be close for many years to come. For central bankers, Basel is a special place.
Our understanding of digital token money has been heavily influenced by cryptocurrencies like Bitcoin. Cyptocurrencies are privately issued currencies denominated in their own units of account. In our illustration, we refer to money based on cryptocurrencies as ‘crypto tokens’. Digital tokens can be issued in conjunction with a private cryptocurrency denominated in its own unit of account; but they can also use an official currency as their unit of account. On the one hand there are private issuers, who claim that the value of their tokens is stable against official currencies; in our illustration we assign this type of token money to the ‘stable coins’ category. However, state institutions such as central banks can also issue digital token money – the SNB, for example, could issue a Swiss franc token. Ladies and gentlemen, as you see, digital token money can take a number of forms. It is important that we understand the characteristics and implications of these various tokens, as they could influence the SNB’s mandate. I will now set out our thoughts on this topic. Privately issued digital token money Let me start by outlining our view of cryptocurrencies, before moving on to discuss stable coins and state-issued digital tokens. We believe that cryptocurrencies and cryptocurrencybased tokens are of only limited use as payment instruments, stores of value and units of account because they are subject to major fluctuations. Crypto tokens are more like speculative investment instruments than ‘good’ money in terms of their characteristics.