Swiss Authorities Call for Study on Government Backed e-Franc
Swiss banking has always been popular because of its unique approach to providing services. This time, it is looking for a revolution. The Federal Council of the country is interested in experimenting with the future of finance. This is why council now wants to start exploring their options in terms of cryptocurrencies.
After providing a home to several crypto and blockchain based companies like Ethereum and even sheltering some crypto miners, the country now wants its own e-franc. The seven-member executive council is calling for a study to assess the risks and advantages of a national, govt. backed, fiat-based cryptocurrency known as the e-franc.
The initiative was started by Cedric Wermuth, the vice president of the Social Democratic Party. The young politician is looking forward to the lower chamber of its parliament, the Swiss National Council, to approve the proposal by the Federal Council executives. If the lower chamber believes that the idea is meritorious, the Swiss finance ministry will begin the study into this matter.
The executive council said, “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.”
It is important to note that Switzerland is already striving to become a crypto friendly nation. Earlier, the economics minister of the country, Johann Schneider-Amman urged the country to ‘become the crypto nation’. The chairman of SIX group, owned by the banks in the country which provides financial infrastructure services to facilitate cashless payments system, Romeo Lacher seconded his views. He said, that it was time that the country starts working on an e-franc backed by the central bank that could help in boosting electronic payments as well as the local economy.
“I believe there would be a lot of upsides, we would be strongly supportive. An e-franc under the control of the central bank would create a lot of synergies — so it would be good for the economy. I don’t like cash,” said Lacher.
The central bankers of the world are not convinced that crypto coins could do anything good for them. As far as the current stance is considered, very few countries have a favorable view of these coins. Large markets like US, China and South Korea are already tightening regulatory stance over these coins and are especially averse to ICOs. New regulations are expected from them that could classify these coins as securities but will also bring several tax and legal complications along.
Sweden is one of the few countries where the central bank is thinking about a fiat-based digital currency. The Riksbank has strongly hinted towards an e-krona. The bank is known for its advanced stance but the Swiss National Bank may still have a conservative approach towards their own digital currency. In response to Lacher’s comments, the bank said that there is ‘no need’ for such a coin in the country. In the meanwhile, China, Russia and Indonesia are working on creating their own currencies.