Switzerland’s government has requested a report into the risks and opportunities of launching its own cryptocurrency called “e-franc”. The lower house of the Swiss parliament must now decide whether to back the Federal Council’s request for a study into the subject that has already been discussed in Sweden.
The Bank of International Settlement in March warned central banks to think hard about potential risks and spillovers before issuing their own cryptocurrencies. In Switzerland, if the proposal is approved, a study will be produced by the Swiss finance ministry. No timing has been given on when it would be published should the go-ahead be given.
Swiss lawmaker Cedric Wermuth, vice president of the Social Democratic Party, called for the study. In its response on Thursday, the Swiss government, or Federal Council, backed the proposal to look into it, although it said there were hurdles.
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 said. “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.
The Federal Council statement
Several countries have begun evaluating the viability of introducing their own state-backed digital currency, with Sweden’s Riksbank saying an e-crown might help counteract issues arising from declining cash use and help make payment systems more robust. Venezuela has issued a state-backed coin, but major developed economies have so far steered clear.