According to Swiss National Bank Governing Board member Andrea Maechler, cryptocurrencies are not true competitors to conventional currencies despite soaring interest in products like bitcoin,
Private-sector digital currencies were better and less risky than any version that might be offered by a central bank, Maechler added, indicating the SNB has no appetite for launching its own e-franc.
“Digital central bank money for the general public is not necessary to ensure an efficient system for cashless retail payments,” she said in remarks prepared for an event in Zurich.
“It would deliver scarcely any advantages, but would give rise to incalculable risks with regard to financial stability by calling into question the tried-and-tested two-tier system,” she told an event in Zurich.
Central bank digital money could increase the risk of bank runs by making it easier for people to transfer their money out of their commercial bank accounts if they felt the bank was in difficulties.
Maechler said the hype built up around cryptocurrencies had become considerable and far outweighed their actual use.
Money must be a viable medium of exchange and be a stable unit of account for the value of the goods and services that are exchanged, she said, adding it should also be used as a long-term store of value, for example for saving.
“Cryptocurrencies such as the much-discussed bitcoin do not perform these functions adequately, if at all,” Maechler said.
Digital currencies had a high degree of price volatility and are more of a speculative investment instrument than a means of payment capable of maintaining their value, she said.
Because blockchain makes verified information available to a large number of parties simultaneously, it is particularly appealing in the case of complex processes where coordination is required across a range of participants, Maechler said.