Reuters reported Switzerland is formally considering the possibility of a state-backed cryptocurrency. Its government has asked legislators commission a study on the pros and cons of a Swiss “e-franc.”
Lawmaker Cedric Wermuth, vice president of the Social Democratic Party, proposed the study which the Federal Council put forward. The council’s statement read:
“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 be adopted to examine the risks and opportunities of an e-franc and to clarify the legal, economic and financial aspects of the e-franc.”
In case the lower Parliament approves the report, the Swiss Finance Ministry shall produce a study. However, they have not given an exact time on when the publishing would commence, if the green signal is given.
The study was proposed by Vice President of the Social Democratic Party, Cedric Wermuth, who also oversees law-making in the country. Although a lot of obstacles are in its way, the Swiss government has supported this proposal, as stated in its response on May 17, 2018.
Thus far, the Swiss National Bank (SNB) has expressed caution on the matter. It is of the opinion that a privately-owned cryptocurrency was superior and less problematic than a state-backed digital currency.
Following the global interest in cryptocurrencies, government and private institutions have sought to adopt the best blockchain and cryptocurrency strategies. The first point is usually to get a better understanding of the space and how it would affect the institution.
Owing to its unpredictable nature, cryptocurrencies have caused a lot of fuss among lawmakers and international governing bodies, alongside inviting major scrutiny.
The sudden skyrocketing price of digital currencies has also been a contributing factor, coupled with most mainstream news outlets focussing only on this aspect, instead of the underlying technology’s benefits.
However, 2018 has seen swift developments in the blockchain space, with companies from a variety of sectors implementing the technology across their functions.
A lot of nations are now rapidly following suit – conducting tests and evaluating a possible state-backed cryptocurrency.
Sweden’s Riksbank has stated that their digital currency, the “e-crown” might help towards preventing problems owing to the decline in use of cash and to facilitate sturdy payment systems.
Developed economies have mostly stayed out of the whole cryptocurrency arena but developing countries like Venezuela have issued their own state-backed coins.