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Electronically to the Swiss franc? Not so fast, authorities say

ZURICH (reuters) – The Swiss government has a downbeat view of the creation of a central bank of digital currency to members of the public, saying it would do more harm than good and destabilize the financial system.

FILE PHOTO: a 100 Swiss franc bank notes are withdrawn from an ATM in the northern Swiss town of Kreuzlingen in this picture illustration, January 16, 2015. REUTERS/Arnd Wiegmann

“Everyone’s central bank, the digital currency that would not bring any additional benefits in the case of Switzerland, at this point in time. Instead, it would lead to a new set of risks, in particular with regard to financial stability,” the cabinet said after a meeting on Friday.

The parliament had asked the government to look at the prospects for the creation of an electronic Swiss francs.

The Swiss National Bank has taken a skeptical view of the roll-out of an electronic Swiss francs for use by the general public. The SNB has been the investigation of the wider use of the digital and the central bank-currency in addition, the Bank for International settlements.

The central bank of digital currency refers to money that a central bank would be in a digital format and making them available to the public at large. It would be an addition to the existing forms of money, such as banknotes, and sight deposits held by commercial banks at the central bank.

Most of the central banks of the research on the topic and the possible impact it can have, but only a few, such as China and Sweden, with a plan to solve the problem of the digital currency in the short to medium term, the government should be noted.

The proponents believe that the central bank will be the digital currency will make payments more efficient, the monetary policy is more effective and the financial system more stable, as the reduction of income tax offences, and money laundering.

However, the Swiss government said that the central bank will be the digital currency is not able to meet your expectations fully, and that the consequences can be far-reaching.

“With the further development of the central bank of digital currency is limited to the financial players in the market, and it seems to be a promising strategy,” he said.

“It wouldn’t be the same, far-reaching and fundamental implications as to a universally accessible central bank of digital currency. A ‘wholesale trade token, issued by, the SNB should be able to help you to improve the efficiency in the trading, settlement and administration of securities.”

European Central Bank President, and Christine Lagarde, said on Thursday that the euro zone will need to be “lead” on the issue.

Reporting by Michael Shields

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