Switzerland to Request Study for State-Backed Cryptocurrency

Switzerland Cryptocurrency

Reuters reports May 17th that the Federal Council of the Government of Switzerland has requested a study on the risks and opportunities of introducing its own state-backed digital currency, to be called the e-franc.

The council reportedly moved to look into the subject due to prompting from Swiss lawmaker and vice president of the Social Democratic Party, Cedric Wermuth. The ball is now in the lower house of the Swiss parliament to decide whether to support the call for research. If it gets approved, the Swiss Finance Ministry will conduct a study on the subject. There is currently no time frame for the process. The council announced that:

“The Federal Council is aware of the major challenges, both legal and monetary, which would be accompanied by the use of an e-franc… It asks that the proposal is adopted to examine the risks and opportunities of an e-franc and to clarify the legal, economic and financial aspects of the e-franc.”

The idea to develop a national cryptocurrency had been proposed last February by Romeo Lacher, chairman of the Swiss Stock Exchange, SIX. Lacher had remarked that:

“An e-franc under the control of the central bank would create a lot of synergies – so it would be good for the economy.”

Other financial institutions in the country, however, remain wary of cryptocurrencies. Swiss National Bank board member Andrea Maechler remarked a month ago that private-sector digital currencies are better and less risky than nationally-issued versions, as a government-issued cryptocurrency could increase the risk of so-called “bank runs.”

Earlier this May, Swiss bank UBS declined to offer Bitcoin trading and other cryptocurrencies. The bank’s chairman, Axel Webber, even called for stricter controls on crypto, arguing that “[cryptocurrencies] are often not transparent and, therefore, open to being abused.”

Other nations have also started considering the idea of a national digital currency. Sweden’s Riksbank is reportedly investigating the option of issuing an e-krona, as the use of physical banknotes in the country has declined.

Related Cryptocurrency News

Leave a Comment