September 26, 2022

Swiss authorities: “The risks of the digital franc outweigh its benefits”

The Swiss government decided to postpone the issue of the digital Swiss franc, considering that the risk threats to financial stability outweigh the benefits of stablecoin.

Stablecoin economistsThey believe that the digital franc will improve payments and financial services provided to the population, as well as increase the effectiveness of the country's monetary policy and strengthen its financial system. In addition, the digital currency of the Central Bank will help reduce the number of tax violations and prevent money laundering.

However, according to an analysis conducted by the Federalby the Swiss Council, the digital currency of the Central Bank cannot fully meet all these expectations and does not entail any additional advantages. On the contrary, the Swiss government believes that the digital franc will lead to new risks that could undermine the country's financial stability.

At the same time, the Federal Council and the Central Bank of Switzerlandthey allow the further development of the digital franc if it is not accessible to a wide audience, and will only be used by certain players in the financial market. In their opinion, only in this case can the efficiency of trading, settlements and securities management be improved.

Given the increasing interest in cryptocurrencies, andAs well as digital payment systems and state stablecoins, the Federal Council and the National Bank of Switzerland believe that this sphere needs to be more thoroughly “worked out” before issuing state cryptocurrency.

Swiss Federal Council last monthproposed improving legislation on distributed ledger technology to remove barriers to its application. However, the other day, the Swiss Financial Market Control Authority said that it is better for the country to refrain from using blockchain in order to maintain its reputation as a world financial leader.