The Federal Council of Switzerland government has requested legislators commission a study on the benefits and risks of its new state-backed cryptocurrency: ‘e-franc’.
According to reports by Reuters, the Federal Council of Government in Switzerland has moved a step ahead requesting the study on risks and benefits involved in e-franc, state backed cryptocurrency.
The council explained:
“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 asks that the proposal be adopted to examine the risks and opportunities of an e-franc. Since to clarify the legal, economic and financial aspects of the e-franc”.
For now, the decision has to be taken by lower house of Swiss parliament whether to support the council’s request. Accordingly, the study subject will be held by Swiss Finance Ministry.
However, in last February, the idea of developing stated backed cryptocurrency was put forward by Swiss Stock Exchange Chairman, Romeo 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”.
Further, several financial institutions in Swiss have stayed cautious on issuing or introducing its own cryptocurrency. In the previous month, Andrea Maechler, the Board Member of National Bank Swiss said that private sector cryptocurrencies are less risk compared to nationally issued. Likewise, government backed cryptocurrencies probably increase the risks.
Remarkably, Riksbank in Switzerland seems to be in process of encouraging cashless society. However, with the intention to keep citizens under government guardians.
At last, if the request is approved, the finance ministry will produce the study subject. Therefore, no particular timings on when it would be publish is given.
Cedric Wermuth, Swiss lawmaker and Vice president of the Social Democratic Party has called for the study. Considering the complications, with response to the Federal Council, Swiss government proposal to look into the study of state backed cryptocurrency.