Early indicators suggest that Switzerland’s economy is moving towards full digitalization, as a recent survey reveals that digital transactions have now outpaced cash payments.
Switzerland has traditionally embraced cash, with the average individual holding approximately $10,481 in bills and coins. This cash-centric culture is cherished for its privacy and convenience. However, findings from a new survey conducted by the Swiss National Bank show that debit cards have now overtaken cash as the dominant payment method.
The survey indicated that in 2024, 35% of in-store purchases in Switzerland were made with debit cards, surpassing cash at 30%. This marks a significant rise from 2017, when only 21% of transactions were completed using cards, and cash still accounted for 70%.
Historically, the Swiss have clung to their cash-based practices, even as digital payments gained traction globally. However, experts suggest that this transition to cashless transactions isn’t particularly surprising.
In an interview, an economist noted that comparisons with other countries reveal a strong attachment to cash in German-speaking nations, distinct from the trends in the Netherlands and Scandinavia. He mentioned that the pandemic “has accelerated the shift away from cash here as well.”
Potential for Swiss Stablecoin
Despite the growing preference for digital payments, Switzerland continues to hold a significant amount of cash, ranking second in the world for per capita cash holdings, just behind Luxembourg.
Nonetheless, the trend continues towards reduced cash usage. The SNB’s October announcement regarding public transport operators planning to limit cash acceptance further illustrates this movement. In a discussion with crypto.news, an industry expert suggested that Switzerland’s growing reliance on card payments “signals a broader acceptance of digital forms of currency.”
“While crypto payments are still considered niche today, the transition to digital payment methods establishes
an ideal environment for utility, especially considering that 8% of the global population now owns crypto. Worldline already facilitates crypto transactions at over 85,000 merchants, with cities like Lugano accepting Bitcoin and stablecoins for everyday purchases.”Industry Expert
This expert also cited cities such as Lugano, where Bitcoin (BTC) and stablecoins are already utilized for regular transactions, as evidence of increasing acceptance.
“We anticipate that adoption will evolve from a novel concept to broader options in the retail sector, although at a pace slower than in countries where inflation pressures drive the demand for tokenized dollars.”
Industry Expert
The SNB’s survey also revealed that 18% of transactions in the nation were conducted using mobile payment applications, while credit card usage accounted for 14%. Addressing the rising acceptance of mobile payments, the expert noted that stablecoins and tokenized assets could play a significant role in Switzerland’s changing financial landscape, positing that stablecoins are “well-positioned to capture a substantial share of the market since they eliminate the volatility issues often associated with crypto assets.”
“While dollar-denominated stablecoins currently have a 99% market penetration, there is ample room for a Swiss stablecoin. The growing use of mobile payment applications like TWINT indicates a readiness to adopt new payment technologies.”
Industry Expert
The next logical progression, according to the expert, is the introduction of tokenized Swiss francs that can “integrate with mobile apps, facilitating payments while offering new functionalities, such as instant settlement, automated smart contracts, and opportunities within decentralized finance.”
No Immediate Plans for CBDC
Even with the country’s increasing dependence on digital payments, the SNB has made it clear that it is not in a hurry to launch a central bank digital currency, especially as it remains cautious about potential costs and privacy implications related to digital currencies.
A senior economist at the SNB noted that the central bank is hesitant to replace cash with a CBDC, as the “risks outweigh the benefits compared to the current systems.”
This economist further emphasized that one significant reason for Switzerland’s hesitance to launch a so-called e-franc is the priority placed on data protection, pointing out that “one advantage of cash is that it allows for completely anonymous transactions.”
“Conversely, digital payments generate a lot of data—not just financial data, but also information regarding purchases and locations.”
Senior Economist
As cash usage continues to decline in Switzerland, the expert pointed to recent advancements in Swiss banks, such as UBS issuing digital bonds and the ongoing pilot program for SNB’s wholesale CBDC. He remarked that institutional engagement with blockchain technology is “clearly accelerating,” and added that Bitcoin Suisse AG anticipates this trend to “increase across various institutional sectors in the upcoming months and years.”