Switzerland should launch an e-franc not as a means of levying negative interest rates but as an anonymous, efficient replacement for cash, Swiss professor Roger Wattenhofer told finews.tv in an interview.
«It is important that the central bank does not have a hidden agenda,» Roger Wattenhofer told finews.tv recently. The 51-year-old Swiss academic is the head of ETH Zurich’s Distributed Computing Group and publishes prolifically in computer sciences and IT, including on distributed systems.
Switzerland has been more reticent than other countries or European Union, which wants to decide by summer whether to go ahead with a digital euro. The ECB appears poised to use the central bank digital currency, or CBDC, «as an excuse» to roll out negative interest rates – which is wrong, Wattenhofer said.
«In order to work, CBDC must be a perfect cash replacement: anonymous as much as possible, not interest-bearing, and working if there's a power outage.» Wattenhofer said he believes bitcoin and other currencies will mainly be used for investment, not payments.
He is one of two Swiss professors who last year launched an effort to urge Switzerland’s central bank to produce an e-franc that commercial banks can acquire against securities or physical banknotes. Such an e-franc system would complement the monetary system of Switzerland with a digital form of the legal means of payment, he and Hans Gersbach argued.
«With e-francs, the government has a cash alternative which is also completely free of cost and easier to pay with for the consumer,» Wattenhofer said. «It is much cheaper for the central bank and retailers to produce and move around. It’s what marketing guys would probably call a win-win-win.»
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