Switzerland, one of the most crypto-friendly governments in Europe, has requested a study examining the risks and opportunities of releasing a government-backed digital currency tentatively called the “e-franc.”
Reuters reported on May 17 that the Swiss The Federal Council pursued the study of potentially releasing a state-sponsored cryptocurrency at the request of Cedric Wermuth, vice-president of the Swiss Social Democratic Party.
The Federal Council’s request to investigate the effects of a potential e-franc has now been sent to the lower house of the Swiss parliament. If approved, the Swiss Finance Ministry will be mandated to carry out the research and present its findings to the government.
According to an official statement cited by Reuters, the Federal Council recognizes that the e-franc poses “major challenges, both legal and monetary” and seeks to “clarify the legal, economic and financial aspects of the e-franc.”
Romeo Lacher, chairman of the Swiss stock exchange SIX, proposed the idea to develop a Swiss national cryptocurrency in February. Switzerland has adopted a bevy of regulations that favor blockchain companies and has attracted many startups and initial coin offerings to launch on Swiss territory from across the world, especially to the ‘crypto Silicon Valley’ city of Zug.
Although some Swiss banks have opened up to blockchain, becoming among the first in the world to offer clients cryptocurrency services, many traditional financial and governmental institutions remain cautious about embracing the new tech.
Switzerland is not the first country to consider releasing a state-sponsored cryptocurrency. Venezuela became the first country in the world to experiment with a state-backed cryptocurrency called the Petro, which it launched in February 2018. The Marshall Islands has announced plans to roll out a national cryptocurrency by the end of the year.
Officials from Iran, Sweden, and Russia have also publicly proposed implementing their own national cryptocurrencies.