The representatives of the Swiss retail banking industry are equally opposed to the introduction of an electronic currency for the general public. It would directly affect their business and heighten the risks for the banking system, they say.
«Much like the concept of the sovereign money, it might increase bank runs in times of uncertainty, because everyone can instantly withdraw the money from the bank account at any point of time and deposit it at the central bank,» said Alexander Koch, an economist at Raiffeisen Switzerland.
The Concern of Central Banks
The Swiss Bankers Association is pleased that SNB and SIX (where banks have a strong influence) have taken the lead together for the limited project of a digital currency for the financial market. «Today, private currencies can't replace digital central bank money adequately,» said Hess.
The projects such as Libra have caused some concern in the market (and among central bankers). The project group may insist that the link to a basket of global currencies would make it stable. But the introduction of such a currency for consumers is raising fundamental issues such as about the future effectiveness of monetary policy. It might also jeopardize a digital central bank money for the financial market if a fast and efficient private mass-market means of payment has already been introduced.
- << Back
- Page 2 of 2
