Cryptocurrencies ‘too primitive’ for digital Swiss franc
A board director at the Swiss National Bank (SNB) says that cryptocurrencies and the blockchain technology they run on are still far too primitive for Switzerland’s central bank to consider issuing a digital franc.
Thomas Moser’s comments are in line with the stance adopted by the SNB towards an e-franc version of bitcoin. But Moser, speaking at this week’s three-day Crypto Valley Association (CVA) blockchain conference in Zug, compared blockchain in its present form to the “useless innovation” of compact discs.
He suggested that the digitisation of music only became useful and practical once the innovation of streaming changed the landscape by providing a completely new model for consumers. “Something similar has to happen with bitcoin,” Moser told his audience. “People will only switch to something new if it works better or is cheaper.”
He acknowledged that while the SNB was unlikely to be interested in blockchain currencies for the foreseeable future, the underlying technology could hold promise – but only once it “looks very different from what it does today”.
Blockchain, or the Pope?
Other conference panellists who discussed blockchain in a session titled “Future of Token Economy” were more upbeat in their outlook for the technology, predicting that it would be widespread and mainstream within five years. Some suggested that central banks have a monopoly on creating money at present and therefore a vested interest in talking down the prospects of decentralised cryptocurrencies.
The conference also provided one blockchain champion from the establishment in the form of Switzerland’s economics minister Johann Schneider-Ammann. In his opening address he quipped that he had turned down an invitation to meet the Pope, who visited Geneva on Thursday, so he would be able to attend the Zug summit.
Schneider-Ammann has already championed the cause of Switzerland as a “crypto nation” and his speech warned of the risks of both moving too slowly and too quickly into novel forms of innovation such as blockchain.
However, earlier this week the Basel-based Bank for International Settlements (BIS) criticised Bitcoin and other cryptocurrencies for a series of perceived technical flaws. These made them unsuitable as a global means of payment, BIS stated.