Switzerland has made a name for itself as a remarkably cryptocurrency-friendly nation. During the last weeks, however, there has been much talk of central bank digital currencies (CBDCs). However, Switzerland has now shot down this idea – without closing the door for further crypto-friendly regulations.
Switzerland says ”not now” to public CBDC
This news first came on December 13th, in a press release on the Swiss Federal Council’s website. The press release states that Switzerland’s Federal Council recently went on to approve a study report examining benefits of CBDCs.
Now, it would appear that this report is complete. Moreover, it states that the creation of a ”digital franc” could face severe difficulties. As such, the perceived risks of a Swiss central bank digital currency is supposedly currently too great for a successful launch.
Specifically, the report states that a Swiss CBDC would not ”meet expectations”. For example, it says that a digital franc would be lacking in areas of ”payment efficiency, [enforcing] effective monetary policy, and a stable financial system”.
Consequently, it states that such a digital franc would bring ”no benefits” at the moment:
”Universally accessible central bank digital currency would bring no additional benefits for Switzerland at present. Instead, it would give rise to new risks, especially with regard to financial stability.”
Observer suggests this clears the way for regulatory framework for real cryptos
Additionally, the Swiss National Bank (SNB) has also gone on the record supporting this view. It argues that the potential introduction of a digital franc would bring with it new risks to domestic monetary policy.
As a result, the report says that the introduction of a CBDC would only be ”reasonable” if it was for the sole use of financial market actors.
”A ‘wholesale token’ issued by the SNB could possibly help to enhance efficiency in the trading, settlement and management of securities,” according to the announcement.
Nevertheless, the lukewarm response to Swiss CBDC should not be mistaken for regulatory crypto-aversion. For example, the Swiss crypto investor and entrepreneur Marc Bernegger recently spoke with Cointelegraph.
Moreover, Bernegger said that this latest announcement could instead be beneficial for cryptocurrencies in Switzerland. ”I think that the recent announcement is still in line with Switzerland’s crypto-friendly approach,” Bernegger said, before continuing:
”I personally don‘t see that many real advantages of an electronic Swiss franc and as a cryptocurrency entrepreneur, I rather see a regulatory framework which enables progress for real decentralized cryptocurrencies like Bitcoin. The developments in this field will have a far bigger impact than central bank-backed stable coins.”
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.