. e. less negative, interest rates, which led to an upward drift in saron, shown by the black line in chart 4. these upward pressures on saron and other short - term money market rates, while anticipated, were not desirable from a monetary policy perspective. since last november, the snb has conducted a number of operations to keep secured shortterm money market rates close to the snb policy rate. between november 2019 and july 2020, and in particular since the end of march, we conducted several fine - tuning operations in the overnight segment of the repo market. these operations are shown as red diamonds in chart 4. in a fine - tuning operation, the snb places so - called ‘ cash provider quotes ’ directly on the repo trading platform, which any repo market participant can then ‘ hit ’ if they choose to do so. when the snb offers funds at a particular quote, cash takers have no reason to accept liquidity at a higher – that is, less attractive – interest rate. with these fine - tuning operations, the snb can cap repo rates and limit upward spikes. since july, we have further supported the gradual convergence of saron towards the snb policy rate by auctioning one - month funds on the repo platform. these auctions are depicted as blue triangles towards the right - hand edge of chart 4. unlike fine - tuning operations, with which the snb caps interest rates, the snb ’ s one - month auctions offer liquidity on a medium - term basis. banks can satisfy some of their demand for liquidity by participating in these auctions. as the participating banks are then no longer as dependent on the secured interbank market for obtaining the desired amount of liquidity, aggregate demand for overnight liquidity in the repo market falls, thereby reducing upward pressures on saron. we also wish to note that, over time, liquidity can be redistributed between banks via other channels than just the repo market. for instance, liquidity redistribution may take place via the transfer of customer deposits and longer - term deposits between banks. naturally, such adjustment processes take some time. let me summarise the key points we have made so far. the steering of short - term money market rates continues to work – even in negative territory. three interest rates play a key role page 10 / 13 here. the snb policy rate is used to communicate the monetary policy decision and, in

collaboration with private stakeholders. the results have yet to demonstrate that dlt is superior to a modern rtgs. yet, in other areas of core infrastructure, such as securities settlement, it is entirely plausible that dlt - based systems could take hold. the second question is : how should existing systems based on conventional technology and new dlt - based systems interoperate? should central banks or private sector players establish this link? specifically, in this context : should central banks offer a digital token for certain dlt applications – such as securities settlement? here, too, while a number of experiments are underway, there are currently no examples of such tokens having become established. furthermore, private sector providers can themselves put their money in dlt systems by ‘ tokenising ’ it ( e. g. in the form of ‘ stable coins ’ ). 10 as you can see, ladies and gentlemen, there are a lot of questions still to be answered, and they will require careful analysis. innovation is important, but it must not come at the expense of stability or confidence in existing payment systems. the fourth challenge relates to the downside of digitalisation : cyber risks. cashless payments are a particularly attractive target for cyber attacks. a lot is at stake for central banks in this regard too, as a loss of confidence in the payment system could ultimately undermine confidence in money. tackling such risks may open up new business opportunities. achieving significantly greater resilience to cyber risks could give switzerland an important competitive edge in the future. in particular, it might be worth investing in a new, robust and secure data communications infrastructure. promising solutions are currently being developed right here on our own doorstep. for example, a team from eth zurich has created scion, a new internet architecture which enhances the security and reliability of internet communications considerably. this technology could form the basis of a secure swiss finance network. for the while such tokens would be backed by an official currency like the swiss franc, they represent a claim on a given private sector provider, not on the central bank. page 8 / 9 swiss payments ecosystem in particular, this would allow secure and flexible communication between participants. to meet these four challenges and prepare for the digital future, the swiss financial centre needs to engage in an open dialogue on strategic options. it is important that we reach consensus on what a robust, attractive and future - proof payment system in switzerland should look like. which digital challenges can the interested parties manage on their own?