Thomas Moser, the board director of Swiss National Bank (SNB), while addressing to Crypto Valley blockchain conference in Zug said that blockchain technology and cryptocurrencies are currently far too nascent for the Swiss Central Bank to consider issuing a digital franc.
People switch to something new only if it’s better or cheaper.
Moser response comes in line with SNB repeated message FT that it did not consider any need for such a move. While resounding his point, he related blockchain in its present form to the “useless innovation” of compact discs (CDs). According to him “People will only switch to something new if it works better or is cheaper” like they did in the case of music distribution industry.
According to him, the digitisation of music only became useful and practical once the innovation of streaming changed the landscape by providing a completely new model for consumers. While Moser eliminated SNB interest in blockchain currencies for the foreseeable future, he did admit that the underlying technology could hold promise, but only once it “looks very different from what it does today”.
E- Franc might be a distant dream
Over a couple of months there has been mounting calls for Switzerland, which is called by many experts as “Crypto Nation”, to introduce a blockchain-based national cryptocurrency. Romeo Lacher, chairman of the SIX Group that operates the Swiss stock exchange, recently contributed to the debate by adding that
“An e-franc under the control of the central bank would create a lot of synergies – so it would be good for the economy,” he told the Financial Times newspaper. “I don’t like cash.”
Earlier in June, Fintech Rockers think tank of Swiss financial professionals issued its vision of a Crypto Franc to be run on a national blockchain and issued by the SNB.
Fintech Rockers proposal as quoted
“Such blockchain infrastructure carried jointly by all Swiss cantons, will have an equivalent catalyst effect as the initial introduction of the railway system or the creation of the Gotthard tunnel during the age of industrialization,”
the document stated.
With all the buzz going around SNB has always maintained a stance of being “not interested “in issuing E Franc and now Thomas Moser statement is just an addition to it.
International pilots underway for a few countries
While Swiss doesn’t wish to start a cryptocurrency of its own, a lot of other countries have already started working on pilots to test whether cryptos and fiats can co-exist. Sweden, where cash is being rapidly phased out, is one of the global leaders in this field, advocating an “e-krona”. Estonia is also planning an “estcoin”. Venezuela has recently launched the “petro” – a digital currency backed by its oil reserves – and is reportedly planning a second coin backed by precious metals. It is also rumoured that Iran is considering a similar route.
The precautions by the Swiss National Bank could be strong economic move, but definitely, it’s not a pleasing news for the crypto community which envisions the country to be a front-runner in cryptocurrencies and blockchain.
Is the Swiss Central Bank right in its move to not to consider E -Franc? Will it lose its edge over Scandinavian counties which are progressing with a digital version of their Fiats? Do let us know your views on the same
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.