Swiss National Bank Chairman Martin Schlegel recently expressed Switzerland’s continued apprehension towards virtual currencies despite the significant rise in crypto prices over the past few years.
Chairman Martin Schlegel, representing the Swiss National Bank, emphasized the enduring importance of physical cash in Switzerland’s payment system during a statement on Thursday, Nov. 7, as reported by Reuters. He pointed out that despite the remarkable growth of cryptocurrencies like Bitcoin and Ethereum, they still represent a ‘niche phenomenon’ within the financial landscape.
Schlegel avoided making predictions about the crypto market’s future in Switzerland but highlighted the infamous volatility of these digital currencies. He argued that this instability severely restricts their usefulness for daily transactions.
He also voiced concerns over the substantial energy consumption associated with cryptocurrency mining and their association with illegal activities, making regulation a complex issue. However, Schlegel mentioned that the Swiss National Bank is not turning a blind eye to technological advancements. He brought attention to a pilot project focused on central bank digital currency aimed at enhancing interbank payment processes. Even as the country delves into the potential of governmental digital currencies, Schlegel underscored the bank’s dedication to maintaining cash circulation.
“Cash is expected to maintain a significant role in our future, despite the move towards digital payment systems,” stated Martin Schlegel.
In a statement made in April, the then-Chairman of the Swiss National Bank, Thomas Jordan, mentioned that Switzerland is not poised to launch a public central bank digital currency (CBDC) anytime soon. He reasoned that the risks associated with this technology still surpass its benefits. Jordan emphasized the presence of efficient and innovative payment solutions in the private sector that currently serve consumers and businesses well, suggesting that a retail CBDC could drastically alter the current monetary system.
