The country has been well on its way to embracing cryptocurrencies, emerging as a global hub for initial coin offerings. However, the Swiss people recently voted against the ‘Sovereign money initiative’, a ruling that would prevent banks from creating new money electronically if they happened to lend more than they had received in deposits.
Swiss National Bank President Thomas Jordan called it a “dangerous experiment”.
This decision was not all too surprising, as Banks are still very cautious about fully embracing blockchain technology, preferring instead to take small steps, like using it to track financial transactions. If accepted, The Sovereign Money Initiative would forced the banks to conform to the same standards as cryptocurrencies, almost all of which are capped from the moment of creation, meaning no new coins can be produced and there can be no inflation.
Emma Dawnay, a board member of a group called ‘Momo’, which launched the Sovereign Money initiative, declared after the lost vote that:
“Cryptocurrency and the blockchain does look like where we’re heading. It could have been used under the system we were proposing. Blockchain technology could be how the Swiss government could try to bring debt free new money into the economy. Despite the vote losing the Swiss central bank is looking at similar things.”
The Momo team is still very confident that their initiative will come to pass. Although they lost the vote, about 25% (or 500,000) of those who voted were in favor of the Sovereign money initiative.
Although the banks may offer some resistance, Emma believes the solution is to educate the people;
“The way money currently comes into circulation still isn’t well understood. Before we can expect change we need to educate people about how money is created and the established institutions which benefit from it.”
Ultimately, if the Momo team can successfully educate the people about how money is created, it’s only a matter of time before the Sovereign Money Initiative will resurge to claim victory in the polls.