Switzerland’s Federal Council has formally requested that the Finance Ministry conduct a study of the risks and potential benefits of a government-backed cryptocurrency, according to a Thursday report from Reuters. The request was made at the urging of the vice president of Switzerland’s Social Democratic Party, Cedric Wermuth, and now moves to the lower house of parliament for approval.
While the Federal Council has moved forward with its request for more research on the issue, it has also acknowledged that there are challenges that must be overcome before any state-backed digital currency could be introduced:
“The Federal Council is aware of the major challenges, both legal and monetary, which would be accompanied by the use of an e-franc. It asks that the proposal be adopted to examine the risks and opportunities of an e-franc and to clarify the legal, economic and financial aspects of the e-franc.”
Switzerland is but one of several countries examining potential state-backed cryptocurrencies. Sweden’s central bank has reportedly been considering the possibility of using a national digital to help deal with the decline in cash use by that country’s citizens, and Norway’s central bank confirmed on Friday that it has extended its own study of the issue.