It has just been revealed that the Swiss Federal Council is planning on moving forward with the plan of creating Swiss-backed cryptocurrency. The Federal Council Of Switzerland is reported to have issued a request for a study on the risk and benefits of launching Switzerland’s own state-backed cryptocurrency. Should the plan go through and Switzerland creates its state-backed cryptocurrency, it would be called an “e-Franc.” According to the early reports, the state-backed cryptocurrency is proposed to be built by a technology similar to Bitcoin.
As told by Reuters, the proposal was originally brought forward to the federal council by the Swiss lawmaker and vice-president of Social Democratic Party Cedric Wermuth. At the time of Wermuth’s presentation of the proposal, Federal Council was in favor of the idea but was also clear that there are potential hurdles that need to be seen to.
The Federal Council stated that it is aware of major monetary and legal challenges that the council will have to face in order to create and use an e-franc. In the same statement, the Federal Council requested that the risk and opportunities of the e-franc should be assessed along with clarifications in the legal, financial, and economic aspects.
The next step in the process involves the lower house of the Swiss Parliament assess the risks and perks of the idea and decide whether to back this idea of not. If the lower house decides to back this project, it will then be forwarded to the Swiss Finance Ministry to look into. Of course, at such an early stage, no time frame for the proceedings has been revealed.
Cryptocurrencies are being accepted by a number of lawmakers around the world and the idea of a state-backed cryptocurrency is not as new as you may think. Riksbank in Sweden argued in the past that a cryptocurrency backed by the state itself will be able to help the government in dealing with financial issues like the declining cash use. Riksbank told that such a cryptocurrency would also improve payment systems around the country.
Another country that has been active in the arena is Venezuela. The recession-struck country launched its own oil-backed cryptocurrency “Petro” a while back. Many believe that through Petro, Venezuela is able to bypass international sanctions and receive foreign investments.
While many components of the governing body are going in favor of the idea of a state-backed cryptocurrency, there are still some who don’t see the benefits and believe that the risks are just too high. According to Reuters, the Swiss National Bank’s governor Andrea Maechler has pointed out that private cryptocurrency projects are less risky and much better than a state-backed cryptocurrency can ever be.
Whether Switzerland launches a state-backed cryptocurrency or not, one thing is very clear: the country is a huge supporter of cryptocurrencies and the technologies they bring.