The board director of the Swiss central bank Thomas Moser voiced his doubts about the possibility of an ‘e-franc’ state cryptocurrency when speaking at the 2018 Crypto Valley Blockchain conference in Zug, Switzerland yesterday.
SwissInfo reports that Moser stated the potential impact of cryptocurrencies and blockchain tech on the traditional finance system is unclear and the technology isn’t at an advanced enough stage for the central bank to consider issuing the e-franc.
The Swiss government called for a study on the use case of a Swiss e-franc in May, but Moser did not shine a positive light on the idea in Zug, comparing current-gen blockchain to the “useless innovation” of CDs.
Moser went on to say that digital music only became a viable alternative to analogue methods when streaming disrupted the space by allowing users to gain easy, often free access to music from anywhere.
“Something similar has to happen with bitcoin,” he said. “People will only switch to something new if it works better or is cheaper.”
Perhaps contradicting his own statement, Moser said the central bank was also concerned about the potential impact on financial stability and monetary policy that digital currencies might have in Switzerland, arguably implying that people are ready to switch to crypto after all.
Moser’s talk followed after the recent criticism leveled against cryptocurrencies by the BIS which acts as a ‘bank for central banks’ in a report titled “Cryptocurrencies: Looking beyond the hype.” The BIS argued that permissionless cryptocurrencies have no use case as a financial instrument, citing technical flaws such as the potential of a fork, along with the lack of accountability in decentralized cryptocurrencies.
Moser agreed that blockchain technology could have a use case in the future but that it would need to look “very different from what it does today.”
The criticism was not seen as unbiased by all panelists, some of whom pointed out the vested interest central banks have in discrediting cryptocurrencies in order to protect their own use case in a rapidly changing economic landscape in which innovators around the world are attempting to develop technologies that break the monopoly that banks have on the financial system and even eliminate the need for centralized banking altogether.
Swiss Minister for Economics Johann Schneider-Ammann who has in the past expressed his desire to see Switzerland become a ‘crypto nation’ spoke more open-mindedly about the technology, saying that there were dangers in moving too quickly with the transition, but that it was equally perilous to move too slowly and risk getting left behind. The minister has a generally positive outlook towards both cryptocurrency and blockchain, stating that he had even turned down an invitation to meet the pope in Geneva in order to attend the blockchain conference in Zug.
Schneider-Ammann, who has previously stated his desire for Switzerland to become known as a “Crypto Nation”, took a more measured tone on this occasion, warning against the perils of both moving too slowly and too quickly into novel forms of innovation such as blockchain.