Is Switzerland Moving Towards a Cashless Future?

Switzerland is exploring the possibility of introducing its own digital currency, known as the e-franc, which would utilize technology similar to that of cryptocurrencies like Bitcoin.

The Swiss Federal Council has acknowledged the significant legal and financial challenges that could arise from adopting an e-franc. To better understand these issues, the Council has requested a comprehensive report to evaluate the risks and benefits associated with an e-franc and to address its legal, economic, and financial implications. Should this report receive approval from the Swiss lower parliament, the Finance Ministry is expected to authorize further in-depth studies.

The proposal for a national cryptocurrency was suggested by Romeo Lacher, chairman of the Swiss stock exchange (SIX). He believes that a central bank-controlled e-franc could provide substantial economic benefits and create valuable synergies.

However, not everyone is in favor of this idea. Andréa Maechler, a board member of the Swiss National Bank, has expressed concerns that private-sector digital currencies might be less risky compared to government-issued ones, citing potential risks such as increased likelihood of bank runs.

Switzerland is known for its positive stance towards cryptocurrencies, with many leading blockchain companies and organizations located in the Crypto Valley near Zurich. However, the potential adoption of the e-franc is still uncertain and would require significant deliberation. If it proceeds, it could have a substantial impact on the crypto industry.

Other countries are also exploring digital currencies. For example, Sweden’s central bank, the Riksbank, has been considering the introduction of an “e-krona” as the country moves towards a cashless economy. This digital currency could address challenges associated with a decline in cash usage.

In contrast, Venezuela’s cryptocurrency, the petro, is primarily viewed as a means for the government to circumvent US economic sanctions rather than a practical digital currency.