The government of Switzerland has requested a report on the risks and opportunities if the country’s state-backed digital currency, “e-franc” is introduced. The request has been made by the Federal Council on behalf of the government. As per the report, the state-backed virtual currency will be similar to the privately launched coins like Bitcoin (BTC) and Ethereum (ETH). However, it will be backed by the state.
Lower House To Decide On The Request
The Federal Council put forth the investigation request on the suggestion of the Swiss lawmaker and vice-president of the Social Democratic Party, Cedric Wermuth. Incidentally, it was the chairman of the Swiss stock exchange SIX, Romeo Lacher, who first put forth the idea of developing a national digital currency in February this year. According to Lacher, “An e-franc under the control of the central bank would create a lot of synergies – so it would be good for the economy.”
Now, the decision rests with the lower house of the country’s parliament. The Swiss parliament will now have to decide whether to give in to the request of the Federal Council or not. Cryptocurrencies have shown a rapid rise in the last few years. Although by the end of December 2017 major Altcoins were found struggling, in the last few months crypto market has once again reached the pinnacles with trade analysts predicting record-breaking growth for BTC, ETH, and similar other crypto coins.
No one can deny the unprecedented growth of cryptocurrency. However, owing to its volatile nature and the discrepancies involved in the transactions the cryptocurrencies have attracted scrutiny from international governing bodies and lawmakers who until now are yet to accept it fully. That can be one reason why many traditional financial institutions in Switzerland including Swiss National Bank and UBS are yet to accept cryptocurrencies.
Federal Council Requests To Clarify Multiple Aspects Related To E-Franc
According to the Council, it is well aware of the major challenges including monetary and legal associated with the use of an e-franc. That is why, the Council has asked to examine the risks and opportunities including the legal, economic and financial aspects associated with the state-owned currency. If the lower court approves, the investigation will be carried out by the Swiss Finance Ministry. However, no time frame has been decided for the process.