describe a concept that enables the operation of a distributed, synchronised database. such a database allows participants to exchange digital assets without involving a centralised third party. page 4 / 6 such new technology is highly relevant for central banks, especially in the context of the ongoing debate about central bank money potentially being issued via a distributed ledger. this idea raises a host of central bank - specific questions that will need to be examined in more detail. the snb is following and analysing developments in this arena closely and is actively involved in discussions with market participants, regulators and other central banks. recent developments in the sic system amid all these longer - term visions, we should be careful not to overlook changes that are just around the corner – or indeed, have already been introduced. so let me return to the present and talk about developments in cashless payment transactions that are already having a tangible effect on central banks around the world. for obvious reasons, my remarks will be based on the situation in switzerland. as i have already mentioned, one of the snb ’ s statutory mandates is to facilitate and secure the operation of cashless payment systems. one of the key ways in which we perform this duty is through our strategic guidance of the sic payment system. this includes approving technical changes to the system and the rules of conduct for system participants, fixing operating hours and rates, and deciding who is granted access to the sic system. at the same time, the sic system is operated not by us, but by six interbank clearing ; system participants are involved in the decision - making process and therefore play a direct part. this configuration makes sic a market solution. another feature is that the sic system is used to settle not only interbank payments, but also a large proportion of retail payments. 8 by virtue of its role in sic, the snb has a substantial influence on retail payments in swiss francs and is, in turn, also impacted by dynamic forces at work in this area. the sic system takes account of such forces and sets the stage for cashless payment innovations, which ultimately benefit customers. this is reflected in the launch of the fourth generation of the sic system in april this year. sic now supports iso 20022, the emerging standard in payment messaging. 9 thanks to the it architecture of the new sic system, innovative services can now be maintained and developed more flexibly and cost - effectively than in the past. furthermore, sic ’ s operating hours are due to be changed next year ;

seems to have been turned on its head : decentralisation – not centralisation – now appears to promise the greatest efficiency gains. i do not, however, believe that decentralisation will become the ‘ new normal ’ in all financial market functions and infrastructures. many existing financial market infrastructures are already highly competitive, and barriers to entry for new technology are correspondingly high. the conventional, centralised model they are built on is already low - cost and meets high safety standards. and improvements are being made all the time. distributed ledger technology, meanwhile, has yet to prove it can outperform the existing set - up with respect to safety and efficiency. having said this, there may be some scope for deploying distributed ledgers in certain complex financial market functions or infrastructures. the settlement and safekeeping of securities is one example. in the end, we may well see conventional and new technologies coexisting or blending. staying with the securities example : it is conceivable that we will see a hybrid scenario. this could entail security - specific information being settled via a distributed ledger, while the payment leg could continue to be effected via a traditional, centralised payment system. cf. diana chan, florence fontan, simonetta rosati and daniela russo, ‘ the securities custody industry ’, european central bank, occasional paper series, no. 68, august 2007. in 1949, the banks started bundling interbank transactions in various clearing houses categorised according to bank type. thirty years later, in 1979, the data processing systems of these clearing houses were also centralised. this laid the groundwork for the current sic system, launched in 1987, which has led to the centralisation and standardisation of all swiss interbank payment transactions via snb sight deposit accounts. cf. fritz klein and guido palazzo, ‘ kulturgeschichte des geldflusses. die entwicklung des zahlungsverkehrs mit fokus schweiz ’, 2003, verlag skv. the g20 countries committed to the principle of settling otc derivatives via central counterparties at the toronto summit in 2010 before passing national legislation on the matter ( art. 97 of the financial market infrastructure act [ fmia ] in switzerland, the european market infrastructure regulation [ emir ] in the european union, and the dodd - frank act in the us ). the terms ‘ distributed ledger ’ and ‘ blockchain ’