The Swiss Federal Council has examined the possibilities of issuing a Central Bank Digital Currency, referred to as crypto franc or e-franc, claiming today that the state digital currency would entail new risks for financial stability.
According to the reports, it seems that the growing interest in the crypto world and the new CBDC catchphrase has also involved the Swiss National Bank (SNB) and the Federal Council for the analysis of opportunities and risks on the issuance of the crypto franc.
At the moment, the outcome would seem to be still negative. The Federal Council has stated that the new digital currency would not bring any added value to Switzerland but rather would have complex repercussions on the financial system.
Certainly, in the crypto-valley par excellence, there are many economists and supporters of the CBDC who claim that the new national digital currency can improve access to payment and financial services for the population.
In their opinion, the introduction of the crypto franc would make payment transactions more efficient, monetary policy more effective and the financial system more stable.
Furthermore, economists also say that a SNB “Wholesale Token” could improve the efficiency of the trading, settlement and management of securities.
Lars Schlichting, an experienced lawyer at LegalTech in Switzerland, comments on this:
“The Swiss National Bank believes that the Swiss financial system is very efficient today and does not consider the introduction of the crypto franc to be worthwhile. However, the Swiss National Bank itself states that it will follow developments in the future and leaves open the possibility of a new assessment should the economic and technological situation change”.
The CBDC case in Switzerland remains open and under consideration, especially as there are many countries in the world that are planning to launch their national digital currency next year or are already testing it.
A practical example is China, which recently announced that it would be testing its digital currency in the cities of Shenzhen and Suzhou.
Even Europe has expressed itself in this regard, with the European Central Bank (ECB) continuing to work on the issuance of its CBDC.
In fact, after stating its readiness to develop its own digital currency, the ECB seems to be taking concrete steps forward. The European leadership, unlike that of Switzerland, seems to be more favourable. According to the new governor of the ECB, it seems that digital currencies could potentially improve the so-called financial inclusion, for example by allowing people without a bank account to have a digital wallet, as well as increasing the level of consumer protection.