‘Cryptocurrencies too primitive for national money’: SNB director

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Matthew Allen
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Cryptocurrencies, such as bitcoin, have been criticised by the Bank for International Settlements for having a series of perceived technical flaws (Keystone)

Cryptocurrencies and the blockchain technology they run on are currently far too primitive for the Swiss central bank to consider issuing a digital franc, says board director Thomas Moser.

Moser’s comments on Thursday reflected the previously stated stance taken by the Swiss National Bank (SNB) towards an e-franc version of bitcoin. But Moser went further at the Crypto Valley blockchain conferenceexternal link in Zug, likening blockchain in its present form to the “useless innovation” of compact discs (CDs).

The digitisation of music only became useful and practical once the innovation of streaming changed the landscape by providing a completely new model for consumers, Moser said. “Something similar has to happen with bitcoin,” he told an audience of blockchain enthusiasts. “People will only switch to something new if it works better or is cheaper.”

Moser’s comments followed hard on the heels of a scathing critique of cryptocurrenciesexternal link by the Bank for International Settlementsexternal link (BIS). Earlier this week, the Basel-based “bank for central banks” lambasted cryptocurrencies, such as bitcoin, for a series of perceived technical flaws. These made them unsuitable as a global means of payment, BIS stated.

In February, BIS general manager Agustin Carstens said cryptocurrencies had “become a combination of a bubble, a Ponzi scheme and an environmental disaster”.

But while Moser ruled out SNB interest in blockchain currencies for the foreseeable future, he did acknowledge that the underlying technology could hold promise, but only once it “looks very different from what it does today”.

‘Crypto Nation’

Other panellists in the “Future of Token Economy” discussion had a much more optimistic outlook for blockchain, predicting that the technology would be widespread and mainstream within five years. Others noted that central banks, which have a monopoly on creating money at present, have a vested interest in shooting down upstart decentralised cryptocurrencies.

The conference did see one blockchain champion from the establishment: Swiss Economics Minister Johann Schneider-Ammann. In his opening address, he quipped that he had turned down an invitation to meet the pope, who was visiting Geneva on Thursday, in order to attend the Zug summit.

Schneider-Ammann, who has previously stated his desire for Switzerland to become known as a “Crypto Nation”, took a more measured tone on this occasion, warning against the perils of both moving too slowly and too quickly into novel forms of innovation such as blockchain.