Before delving into the mechanics, let me touch upon why Swiss franc money market interest rates are in negative territory in the first place. The role of the global low interest rate environment For almost six years now, money market rates in Switzerland have been negative, largely due to the international economic environment. Interest rates on investments denominated in Swiss francs are usually lower than those on investments denominated in other currencies. As a result, Switzerland has traditionally experienced a negative ‘interest rate differential’ versus other currencies. On the one hand, this is due to the fact that inflation in Switzerland has generally been lower than in other countries. On the other, both domestic and foreign investors regard Swiss-franc denominated investments as particularly safe, reflecting the franc’s traditional status as a safe haven in times of heightened international uncertainty. Over longer time periods, investors have therefore been willing to accept a lower return on investments denominated in Swiss francs. Over the past three decades, interest rate levels have fallen markedly around the world. Chart 2 shows that the yields on 10-year government bonds issued by advanced economies – illustrated here by Switzerland (in red), Germany (in blue), the UK (in orange) and the US (in green) – have been on a downward trajectory since the early 1990s. Nominal interest rates have fallen in part because many central banks successfully managed to tackle the high rates of inflation that prevailed during the 1970s and 1980s.

CIX can be a test bed for the recommendations of the Taskforce for Scaling Voluntary Carbon Markets. Example: the recommendation to create mechanisms for signalling demand. CIX is forming a coalition of buyers and sellers committed to high quality credits. This will provide suppliers the confidence to scale up supply and catalyse the development of the carbon market. If CIX can demonstrate the effectiveness of the recommendations of the Taskforce, it will build strong momentum for effective carbon credits markets globally. Let me highlight two significant features of CIX: first, the focus on carbon credits generated through nature-based solutions; and second, the use of technology to ensure a transparent and verifiable carbon market. Nature-based solutions are measures taken to protect, sustainably manage, and restore ecosystems. Examples include reforestation, and restoring peatlands and mangroves. It is estimated that nature-based solutions can provide more than 30% of the climate mitigation needed globally by 2030. Yet, such solutions currently only account for 2% of climate funding. Nature-based solutions are an attractive proposition. They not only green the world, but provide social and economic benefits that make it a better 3/5  BIS central bankers' speeches  place to live in. Take for example the restoration of mangroves. Mangroves not only save carbon emissions but also serve as a natural barrier against floods and support biodiversity. Trust is a critical ingredient for any successful marketplace. The use of innovative technology solutions to ensure the integrity of the carbon credits traded will be a key focus of CIX.