Switzerland Must Adapt to Digital Currencies or Risk Losing Global Financial Relevance

The rise of digital currencies and stablecoins is transforming the financial system, but this shift also poses challenges for traditional currencies like the Swiss franc. As the US creates favorable conditions for dollar-backed stablecoins, Switzerland must adapt to ensure its currency remains widely usable in future financial markets.

Hans Gersbach, Professor of Macroeconomics at ETH Zurich, notes that stablecoins allow programmable payments, faster cross-border transactions, and new digital financial infrastructures. However, their value is pegged to an existing currency, unlike cryptocurrencies like Bitcoin.

Gersbach emphasizes the importance of a clear legal framework for stablecoins in Switzerland, addressing issues such as reserves permitted, user rights, transparency requirements, and insolvency procedures. He also suggests tokenized bank deposits as an alternative, which would maintain the proven structure of the current monetary system while harnessing new technologies.