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Recent Swiss referendum strikes the chord on Bitcoin fundamentals, consensus not suffice though to prove cryptocurrency-backed economy

Last Sunday, Swiss referendum conducted on Sovereign Money (or Vollegeld in German), where almost about 500,000 Swiss citizens casted their votes that sounds in favor of a financial system backed by fundamentals of Bitcoin, which seems to be considerable quantum. However, it wasn’t enough to be a game changer, the radical crusade won only about 25% of all votes in favor of overturning Switzerland’s economic system.

With an intention to establish a robust the financial system, the Sovereign Money Initiative or Vollgeldsystem which would’ve barred banks from ‘creating’ money electronically when lending beyond their cash reserves.

Is Bitcoin perhaps really the solution? One can never forget and disregard that Bitcoin is a pioneer in cryptocurrency industry since 2009 when the financial crisis was at its peak and with an intention of getting financial/debt crisis, the robust technology it is built on has roots going back even further.

While the Swiss Bankers Association has no definite stand on cryptocurrencies, claiming its current systems are superior. The association noted:

The Swiss Bankers Association resolutely rejects the full-money initiative. The existing monetary and financial system offers undeniable benefits and has been shown to work very well in serving the people and the economy.

Should it have been passed, the sovereign money referendum would have given Switzerland’s National Bank (SNB) sole authority in all forms of “money creation”.

However, unwise to disregard about 25% of the votes were in favor of the bill, while those contrasting side, reckons that the new legislation may place superfluous pressure on both the financial market and the SNB. Hence, the SNB itself captivatingly was of divergent opinion on the bill, stating that that central banks shouldn’t be given the responsibility of managing an entire country’s money supply.

Exponents of Vollgeld contend that by entrusting and stroking the central bank exclusively in charge of steering the amount of money in the economy, one can safeguard to prevent the kind of asset price bubbles that caused the 2008 financial crisis.

While Switzerland’s banking industry begs to differ. Opposing the Sovereign Money Initiative, Swiss National Bank’s President Professor Thomas Jordan stated: “The Vollgeldsystem cannot prevent financial bubbles, because these are based primarily on misjudgments of investors.”

Reports also suggested that conservative Swiss citizens were not in favor of tinkering with the economy by employing radical economic experiments.

While as per other sources, Switzerland has been known as the “Crypto-hub” in Zug and its supportive taxation policies that lures crypto-oriented businesses. Zug has also publicized Blockchain-driven municipal trial vote going forward, that likely enable voters to address on local issues. Courtesy: Bloomberg, Swissbanking.org

Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards -84 levels (which is bearish) while USD spot flashes at -102 (highly bearish ahead of today’s US retail sales data announcement) while articulating at 08:17 GMT.

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex

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