Swiss banking is already famous in its own right, but the country's Federal Council is interested in taking another step toward the (possible) financial future. The seven-member executive council has supported a lawmaker's call for a study on the benefits and risks of a national cryptocurrency ("the e-franc").
Cédric Wermuth, a young politician who serves as vice president of the Social Democratic Party, championed the initiative. Now, Switzerland's National Council, the lower chamber of its parliament, must approve the Federal Council's proposal. If the National Council gives the green light, Switzerland's finance ministry will pursue the study.
The executive council was measured in its remarks about the matter:
"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 and to clarify the legal, economic and financial aspects of the e-franc."
Of course, the proposal fits neatly with the attitude of the country's economics minister, Johann Schneider-Amman, who has urged the country to "become the crypto-nation."
Over the last several months, a number of countries have expressed interest in developing their own national cryptocurrencies, including China, Russia, Sweden, the Republic of the Marshall Islands, and Indonesia. However, in the United States, members of the Federal Reserve have not been so enamored with the idea.
Ultimately, there are many concerns that must be addressed before a central bank digital currency becomes even remotely feasible. A cautious approach is clearly warranted.