One of the high ranking representatives of the Swiss National Bank had admitted that the private digital currencies are better than any state-issued money.
Andrea Maechler, a member of the Central Bank’s Governing Board released the statement that ‘Private sector digital money is better and less risky than any of the other version which might be offered by the central bank.’ She also said that ‘digital money and cryptocurrencies are also less prone to any kind of risks involved.’ She herself said in an event in Zurich that ‘the Digital Central bank money for the general public is not necessarily able to ensure an efficient and effective system for any kind of cashless retail payments.’ She also continued to explain as to why a cryptocurrency issued by the central bank is liable to increase the risk of bank runs.
According to her, a government-backed would make it easier for the public to transfer money out of their accounts. The bank issued would delivery very seldom any advantage instead would give rise to a number of risks in context to financial stability. In her option, the state issued cryptocurrency is liable to call a question which is in reference to the tried and tested two-tier system. In this system, the State National Bank acts as a bank to all the commercial banks which in turn ultimately deals with the end customers.
However, not all remarks of Mr Maechler were in favour of cryptocurrency. In her opinion, the cryptocurrencies are not true competitors of conventional currencies. Despite all the hype created by bitcoin, the cause has outweighed its actual use. She also raised a point claiming that money should be an easy medium of exchange, a stable unit of account and a long-term store of value. And if we see it with respect to cryptocurrency then it fails to perform all these functions at a time. She also called digital coins highly volatile and a hypothetical investment instrument instead of a means of payment.
Moreover, the unexpected recognition of cryptocurrency and the points which are against them have no importance in the part of Andrea’s speech. The major thing that must grab the attention of the people must be the indication made by Andrea that the Central Bank and the government of Switzerland do not have any immediate and sudden plans or even a desire that could be implemented to launch the state-sponsored cryptocurrency.