Switzerland's Federal Council Requests Study of Possible State-Backed Cryptocurrency

The Swiss government appears to be taking concrete steps with its plans to create a state-issued cryptocurrency.

Ramy Caspi
Read +
Follow Us

Reuters reported that the Swiss Federal Council has formally requested the Finance Ministry conduct a study of the risks and potential benefits of a government-backed e-Franc cryptocurrency. In the government’s words, the only difference between the e-franc and Bitcoin, would be that of being backed by the state as a legal tender as opposed to being “privately-backed.” Regardless, the underlying technology shall remain that of a publically-viewable blockchain. 

Cedric Wermuth, the vice president of Switzerland’s Social Democratic Party, has formally made the request which now sits with the lower house of parliament for approval. Should the lower house of parliament gives its approval, the country’s finance ministry will conduct a study. While the Federal Council has moved forward with its request, it has acknowledged that there are challenges that must be overcome before any state-backed digital currency could be introduced.

“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,” said Wermuth.

Switzerland is one of several countries who are potentially examining a state-backed cryptocurrency. Sweden’s central bank has reportedly been considering a digital currency, with Sweden’s Riksbank stated that their digital currency, the “e-crown” might help towards preventing problems owing to the decline in use of cash and to facilitate sturdy payment systems. Norway’s central bank has also confirmed to extended its own study on the issue.