Several countries are trying to regulate the cryptocurrency market, and in order to do so and compete with virtual currencies, they want to create their own token. The speech around national cryptocurrencies is that they are ‘sate-backed’ something that decentralized cryptocurrencies are not. And most of the policy makers argue that they are safer investments than normal non-state backed cryptos.
National Cryptocurrencies Are Riskier
According to the Swiss central bank, the institution is not thinking about issuing cryptocurrencies in the middle term. Some countries are trying to create their own cryptocurrencies in order to avoid financial restrictions or because of other reasons. The truth is that the Swiss National Bank has decided to take a more cautious approach.
Andrea Maechler, member of the governing board of the Swiss National Bank said that state-backed cryptocurrencies are riskier than private virtual currencies.
About that she explained:
“We are convinced that private solutions are better suited to meet the end user needs. Digital central bank money for the general public is not necessary to ensure efficient cashless retail payments. There would be little to no advantage in this respect, incurring incalculable risks in the area of financial stability, and this would call into question the proven two-tier system.”
Some enthusiasts have been pushing for an e-franc, the cryptocurrency of Switzerland. But apparently, it would not be a good option for the Swiss population. Switzerland is one of the most opened countries toward cryptocurrencies, and being able to discuss such topics in so open way, shows how the Swiss financial system is related to cryptocurrencies.
Switzerland has its own cryptocurrency valley that is located in Zug, a city near Zurich. There, blockchain and crypto-related enterprises are able to invest and develop their products and services with important benefits form the Swiss authorities.
“Instead of operating as the ‘bank of banks’ today, the SNB would act as a commercial bank towards the customer. This would aggravate the bank run problem in times of crisis,” said Maechler.
Switzerland has proven to be one of the countries at the forefront of the cryptocurrency developments.